Risk Engine
Overview
How Breeze scores lending risk and uses it in allocation decisions.
The Breeze Risk Engine calculates a 0–10 risk score for each lending source.
The rebalancer combines that score with APY, capacity constraints, and
fund-specific settings when it evaluates an allocation.
What the score includes
- Utilization
- Liquidation at risk
- Value at Risk (VaR)
- Borrow usage
- The spread between borrow and supply rates
Each input is converted to a risk band and combined into one weighted score. A high score can reduce a source's allocation cap or remove it from consideration entirely.
How rebalancing starts
A fund can be scheduled for rebalancing when:
- an enabled protocol-risk signal reaches its configured threshold;
- the fund's current risk exceeds its maximum;
- unallocated capital exceeds the fund's threshold; or
- the fund's rebalance period has elapsed.