Understanding the Protocol
The Spool Protocol is an umbrella of many Smart Vaults that dynamically reallocate capital between their various Strategies/Protocols based on the Risk Scores calculated by their individually set Risk Appetite and Risk Models.
Spool allows users to maintain their desired level of risk exposure despite ever-changing market conditions, while also minimizing their gas costs, labor, and exposure to potential black swan events by rebalancing capital at a larger scale.
The Spool Protocol consists of multiple moving parts, namely:
A Spool Smart Vault is a "vault" consisting of creator defined settings for Strategies, a Risk Model, a Risk Appetite setting and (potential) rewards. Anyone can create a Smart Vault by selecting their favorite Strategies, a Risk Model and a Risk Appetite.
A Risk Model is a quantitative model built to assess and assign Risk Scores associated with a Strategy/Protocol. Risk Models are only included within the Spool ecosystem when vetted and voted on by the DAO.
All aforementioned aspects together form the Spool Protocol.