FAQ

Guardian

Insolvent Amount Tolerance (IAT)

It’s a tolerance difference from APR after which we liquidate the position according to the strategy’s “liquidation plan”.

Insolvent Amount Tolerance(IAT)

User Preference Profile (UPP)

A percentage 𝛼 representing the user’s tolerance for downward deviations from the expected APR. Allows users to define their risk tolerance and preferences more granularly, which influences how the PDT and RAF are set for each of their bots.

Performance Deviation Threshold (PDT)

PDT is a predefined limit representing the allowable percentage by which investment actual APR can deviate from its targeted APR before triggering a liquidation process. This threshold is customizable based on user risk tolerance and strategy requirements.

Given the UPP, we can directly link this to the PDT, adjusting the threshold for acceptable APY deviation before triggering a liquidation:

Formula:

$$PDT=E[APY]×(1−𝛼)$$

Where E[APY] is the expected APY and 𝛼 is the UPP.

Performance Deviation Threshold (PDT)

Risk Adjustment Factor (RAF)

Dynamically adjusts PDT based on market conditions and historical performance.

Formula:

$$RAF=1±𝛽×𝜎$$

Where β is a sensitivity parameter derived from UPP and σ is historical volatility.

Strategy Compliance Score (SCS)

Evaluates adherence to expected strategy performance, factoring in APR, TVL, and other metrics.

Formula: calculates the percentage compliance of APR and Indicator group metrics like TVL from their expected values.

$$SCS=[ (1−E[APR]) / (APR−E[APR]) ]×100×[[ (1−E[*IGM]) / (IGM−E[IGM]) ]×100]n$$