Risk Engine

The Risk Engine forms the backbone of SFI Vaults’ safety architecture, actively mitigating risks associated with DeFi investments. It continuously monitors key parameters to safeguard user funds against adverse events.

Key Metrics Monitored:

• Exit Liquidity Risk: Ensures sufficient reserve assets to manage withdrawal requests without triggering liquidations.

• Smart Contract Risk: Monitors for vulnerabilities or exploits within integrated protocols.

• Depegging Risk: Tracks asset prices against their expected value to avert losses.

Protective Actions:

• Dynamic Reallocation: Rebalances assets in response to liquidity trends or market volatility.

• Emergency Liquidation: Liquidates positions in a loss-minimising manner when predefined risk thresholds are breached.

• Capital Protection: Secures principal by optimising exit routes and preserving reserves.

Integration with VMD:

The system provides vault managers with real-time risk analytics and generates automated risk reports to support informed decision-making and strategy adjustments.