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Risk Framework

The OptyFi Protocol seeks to address risk in a well-structured and quantifiable manner. In practice, risk constraints are applied at the Vault level (on chain) and restrict which strategies a Vault can or cannot execute.
Risk constraints are handled differently by Protocol Vaults and Partner Vaults.

Risk Profiles of Protocol Vaults

Each Protocol Vault is assigned a Risk Profile which determines the strategies the Vault can execute.
Risk Profile
Financial Risk
Assets Permitted
No Financial Loss Should Occur
Established Protocols
Stable Coins or Large Cap Assets
Minimal Financial Impermanent Loss May Occur
Established Protocols
Stable Coins or Large Cap Assets
Limited Drawdowns May Occur
Established and Newer Protocols
Also allow Newer, Lower Cap Assets
The technical implementation of Risk Profiles on Protocol Vaults is described here.

Risk Configuration of Partner Vaults

(Partner Vaults will be available with OptyFi V2)
Partner Vaults (deployed for DAO's and Crypto Funds etc) feature highly customizable risk configurations.
Partner Vault owners can chose to specify any or all of the following:
  • whitelisted protocols, pools and/or strategies
  • blacklisted protocols, pools and/or strategies
  • minimal TVL values for pools
  • pool types: single-asset, pegged multi-asset, volatile multi-asset
  • borrow enabled, swap enabled
Based on the constraints specified, the Partner Vault will only be able to execute a subset of the strategies from OptyFi's Strategy Graph.
OptyFi's AI Engine will continuously optimize from within this subset of strategies, rebalancing and harvesting at an optimal frequency.