Vault Limits

The Controller enforces multiple layers of risk management through vault limitations.

These limits ensure diversification and are checked during deposit and redemption operations. If a deposit would push a vault over its cap, the transaction reverts, ensuring the protocol maintains its risk parameters automatically.

Vaults that are out of limits can be rebalanced to maintain efficiency.

Types of Limits

Hard Cap

Each vault has a maximum capacity to prevent over-concentration in any single strategy or asset type. This cap can be adjusted by governance based on strategy maturity and risk assessment.

Maximum Proportion Cap

No single vault can exceed a certain percentage of total protocol assets (e.g., 30%).

Minimum Proportion Cap

No single vault can fall below a certain percentage of total protocol assets (e.g., 5%).

Multi-Vault Scenarios

The following examples show potential vault distributions and how they affect limits.

Total TVL is $100M. Each vault has a$50M hard cap, 45% maximum proportion cap, and 20% minimum proportion cap.

Balanced Distribution

USDC: $33.3M (33.3%)
USDT: $33.3M (33.3%)
USDS: $33.4M (33.4%)

Imbalanced Distribution

USDC: $44M (44%) ← Near limit
USDT: $30M (30%)
USDS: $26M (26%)

The USDC vault is near the maximum proportion cap limit. Deposits larger than $1M into the USDC vault will be reverted.

USDC: $40M (40%)
USDT: $40M (40%)
USDS: $20M (20%) ← Near limit

The USDS vault is near the minimum proportion cap limit. Withdrawals from USDS or deposits into USDC or USDT vaults will be reverted.