Static Governance Parameters
At a foundational level, each AMO’s permissible range is encoded in the AMOParameters structure. These parameters ensure that no single AMO can dominate the overall capital pool or exceed its acceptable risk profile. Specifically:
Maximum Governance Approved Allocation A fixed percentage of total value locked (TVL), preventing overexposure to a single strategy.
Risk Capital Availability Each strategy must hold enough risk capital, defined by a ratio (riskCapitalRatio) ensuring the AMO can absorb potential losses. This requirement effectively limits how large a position can grow given its risk factor.
Maximum Drawdown Limit A hard cap on the largest acceptable single-period loss, allowing governance to define the worst-case outcome each AMO can tolerate before further allocations are curtailed.
Rebalancing Threshold
If an AMO’s actual allocation diverges significantly from its target, the Controller triggers a rebalancing event. This prevents drift from becoming too severe before the system steps in to restore alignment.
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