Strategy Constraints
Capital allocation in Multyr operates within a set of enforced constraints designed to limit risk, structure system behavior, and prevent unsafe capital movements.
These constraints are encoded in smart contracts and applied automatically during allocation and rebalancing.
They define how the system can behave, rather than guaranteeing specific outcomes.
Isolation Constraints
Strategies and adapters are designed to operate in isolation.
This includes:
- strategies interacting with external protocols through dedicated adapters
- separation of state between strategies
- restricted interfaces between strategies and the CoreVault
This design limits the impact of failures in individual components.
A failure in one strategy or adapter does not automatically propagate to others.
Allocation Constraints
Capital allocation is bounded by predefined limits.
These may include:
| Constraint | Description |
|---|---|
| Exposure limits | Caps on capital allocated to a strategy or underlying protocol |
| Capacity constraints | Allocation limited by available capacity in a given target |
| Liquidity constraints | Allocation sized to available market depth |
| Eligibility requirements | Only strategies meeting defined conditions may receive capital |
These constraints ensure that allocation remains within defined boundaries.
Operational Constraints
System operations are subject to additional constraints that affect how and when capital can move.
These may include:
| Constraint | Description |
|---|---|
| Buffer requirements | A portion of capital may be held in liquid form to support withdrawals |
| Batch execution limits | Capital movements may be grouped and bounded in size |
| Execution thresholds | Minimum conditions required before rebalancing is performed |
| Slippage controls | Operations exceeding acceptable execution bounds may be rejected |
These constraints help balance responsiveness, efficiency, and execution risk.
Emergency Constraints
The system includes mechanisms designed to respond to abnormal or adverse conditions.
These may include:
| Mechanism | Description |
|---|---|
| Pause | Temporarily halts certain system operations |
| Strategy restriction | Prevents new capital from being allocated to a specific strategy |
| Capital recall | Withdraws capital from a strategy back to the vault |
These mechanisms are designed to limit exposure during adverse conditions.
Their activation is governed by predefined roles and rules.
Asymmetric Control Design
The system is designed with an asymmetric control model:
- it is generally easier to restrict or stop capital allocation
- it is more constrained to resume or expand allocation
This design prioritizes capital protection and controlled recovery over rapid reactivation.
Governance and Constraints
Governance may configure parameters that influence constraints, such as:
- exposure limits
- allocation thresholds
- eligibility conditions
However:
- constraints are enforced automatically by the system
- allocation behavior remains rule-based
- governance does not directly control individual allocation actions in real time
Important Clarification
Constraints are designed to structure system behavior and reduce risk.
They do not eliminate the possibility of loss.
Users remain exposed to:
- smart contract risk
- underlying protocol risk
- market conditions
- liquidity constraints
Constraints should be understood as risk management mechanisms, not guarantees of safety.