Risk Management

During the Smart Vault Creation Process, users can set a risk provider address. These Risk Providers are the addresses allowed to set risk scores on strategies.

Vault creators can choose to set custom fixed strategy allocations by using the "static risk provider". If they do not choose to do so, then the allocations will be calculated by the system. These strategy allocations will determine how deposited assets are distributed among the strategies within the Smart Vault.

The Allocation Provider, which is decoupled from the risk provider, then calculates strategy allocations based on a range of parameters including risk scores and current APYs.

In addition, the system can allow for multiple Allocation Provider implementations, giving different methods of calculating the strategy allocations, and the Vault Creator can choose which of these Allocation Providers they wish to use.

Please note:

  • Risk scores have to be in the range [1, 100]

  • Smart vault risk tolerance has to be in the range [-10, 10]

  • Configuration is stored and handled in RiskManager.sol

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