Governance and Risk Framework

The OUSD protocol enforces a robust, multi-phase governance mechanism for introducing new Algorithmic Market Operations (AMOs). Any proposed AMO must be submitted through the DAO, accompanied by both a comprehensive technical specification and a formal risk assessment, before it can be approved and integrated.

AMO Addition and Approval Process

1. Technical Submission The technical proposal functions as the foundation of the evaluation phase. It should detail the AMO’s internal mechanics, clarify how it interfaces with external protocols, and define any specific operational parameters or resource requirements. This blueprint serves as the basis for rigorous security auditing, helping to ensure seamless integration and minimal risk to the existing system.

2. Risk Assessment Submission A quantitative risk model is the centerpiece of the approval process. Each AMO proposal must evaluate potential vulnerabilities by analyzing historical volatility, stress testing worst case scenarios, and assessing potential spillover effects on the broader OUSD ecosystem. The model should articulate how these risks will be measured, monitored, and mitigated, giving the DAO a clear framework for informed decision making.

By demanding a high level of technical clarity and robust risk modeling, the governance process ensures that each new AMO bolsters the stability and resilience of OUSD.