Vault Safeguards & Risk Controls
Aurelia implements a layered safety architecture for all vault products, with specific protections in place for both standard Metavaults and leveraged vaults. These safeguards are designed to minimize protocol-level contagion, ensure capital preservation, and maintain system integrity under adverse conditions.
General Vault Safeguards (All Strategies)
Strategy Whitelisting: All yield strategies integrated into Metavaults or Structured Products must be explicitly whitelisted by the team or through governance. Only audited, validated, and/or battle-tested protocols are permitted. Each integration is reviewed for smart contract risk, oracle reliability, and upgrade safety.
Vault Cap Limits: Each vault is subject to hard TVL caps, either static or dynamically adjusted via governance or utilization metrics. These caps limit the exposure of user funds to any single strategy or third-party dependency..
Rebalancing Controls: Vaults rebalance capital only when predefined yield or buffer thresholds are hit. This prevents excessive reallocation or strategy churn, minimizing gas costs and slippage under normal operations.
Oracle Synchronization: All strategy interactions rely on synchronized oracles, TWAP checks, and NAV validation windows. This ensures pricing consistency and prevents actions based on manipulated or stale price feeds.
Withdrawal Buffer: Metavaults maintain a 10% idle liquidity buffer. This allows users to withdraw up to that amount instantly. Rebalancing is triggered only when buffer falls below 5% or exceeds 15%, maintaining efficient liquidity access.
Emergency Pause Mechanism: All vaults are equipped with circuit breakers and pause functionality, controlled via multisig or automated oracle-based triggers (e.g., price volatility, NAV desync, or gas spikes). This prevents further deposits or risky actions in case of anomalies.
Leveraged Vault Safeguards
Leveraged vaults carry inherently higher risk due to undercollateralized borrowing and composable exposure. Aurelia applies strict isolation and control measures to protect users and the broader protocol:
Single Borrower Access (LeverageManager): Only the system-owned LeverageManager contract may interact with the undercollateralized lending pool. End-users cannot directly borrow or manipulate the leverage logic. This enables centralized strategy execution with decentralized accounting.
Collateral Registry & Position Isolation: Each user's leveraged position is stored as a unique data entry in the LeverageManager, tracking debt, collateral and strategy. This allows granular liquidation and position-based risk assessment.
Soft Collateral Constraints: Leveraged vaults implement strategy-specific constraints including max leverage, required collateral types, and drawdown ceilings. These constraints are defined per vault and enforced at deployment level.
Oracle-Gated Liquidations: Liquidation eligibility is calculated off-chain using TWAP-enforced oracle data. Execution is delegated to approved bots that submit verified liquidation calls to the protocol. No on-chain loops or mass liquidations occur unless triggered by oracle-confirmed metrics.
Real-Time NAV Updates: Leveraged vaults update Net Asset Value at regular intervals or when specific thresholds (e.g., price delta, APR fluctuation) are hit. This ensures accurate position health tracking and prevents outdated risk metrics.
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