# Introduction

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## RAX Protocol <a href="#id-7869e8b5-88c6-45d2-a293-58536e4557d0" id="id-7869e8b5-88c6-45d2-a293-58536e4557d0"></a>

RAX is an AI-powered risk intelligence layer for DeFi.

The protocol analyzes on-chain opportunities, simulates possible outcomes and allocates capital through autonomous vault strategies designed to maximize **risk-adjusted yield**.

Unlike traditional yield aggregators, RAX focuses on **risk analysis before allocation**, evaluating exposure, liquidity conditions and protocol health.

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### Core Components <a href="#id-6e49b260-b3ae-4ea0-9ff9-ad9f40edaabb" id="id-6e49b260-b3ae-4ea0-9ff9-ad9f40edaabb"></a>

#### Risk Intelligence <a href="#id-6c04d7ea-6ae3-4c46-bc0d-deee74426e59" id="id-6c04d7ea-6ae3-4c46-bc0d-deee74426e59"></a>

RAX continuously evaluates DeFi opportunities using multiple metrics including liquidity depth, volatility and protocol health to generate a dynamic **risk score**.

#### Simulation Engine <a href="#b8dc42f6-7cbe-4adb-b634-c78ad477daa3" id="b8dc42f6-7cbe-4adb-b634-c78ad477daa3"></a>

Before capital is allocated, RAX runs simulations to evaluate potential outcomes such as:

* expected yield
* downside risk
* drawdown scenarios
* exposure concentration

#### Allocation Engine <a href="#id-932f0ff7-0327-445e-9ab0-3226556afb3c" id="id-932f0ff7-0327-445e-9ab0-3226556afb3c"></a>

The allocation engine distributes capital across strategies based on **risk-adjusted return** rather than raw yield.

#### AI-Managed Vault <a href="#id-1193b7f2-ef7b-4b05-8395-d3056be49bf4" id="id-1193b7f2-ef7b-4b05-8395-d3056be49bf4"></a>

Capital is deployed through an ERC-4626 vault architecture that executes allocation decisions and manages deposits and withdrawals on-chain.

#### RaxBot <a href="#d52423fc-bec0-496a-aa7c-2373eed2f459" id="d52423fc-bec0-496a-aa7c-2373eed2f459"></a>

RaxBot provides an interpretation layer that helps users understand the system’s decisions and risk exposure.

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### Learn More <a href="#a5dfdf43-6136-4542-a1ca-995c603c13c5" id="a5dfdf43-6136-4542-a1ca-995c603c13c5"></a>

Explore the documentation to understand how RAX works:

* Risk Score
* Exposure vs Allocation
* Simulations
* Allocation Engine
* AI-Managed Vault