Risk Engine
The Risk Engine is a component of the Theo Network node responsible for managing risk associated with trading strategies, especially those involving perpetuals trading or lending venues where liquidation may otherwise occur.
Sample risk parameters are provided below. Note that these parameters are subject to change and may vary across trading strategies.
Lending
ETH, BTC, SOL, mETH
USDC, USDT
LTV
~80%
40%
60%
Perp
ETH, BTC, SOL
N/A
Multiplier
10x
2.5x
4x
Mechanism
The Risk Engine continuously polls risk parameters for all positions on trading and lending venues. When a position reaches the MAX value, the Theo node attempts to establish next-block consensus with other nodes before including this information in the block.
Immediately after the block is finalized, the Execution Engine will be prompted to rebalance collateral to reduce leverage to the TARGET value.
Last updated