Allocation Engine
The Allocation Engine is the decision-support core of RAX Protocol.
It is designed to help users allocate capital in a disciplined manner by applying explicit risk constraints, strategy profiles, and real-time risk intelligence.
Rather than optimizing for maximum yield, the Allocation Engine prioritizes control, resilience, and capital efficiency.
How It Works
Each evaluation follows a structured sequence:
Load the vault's current state and active mandate
Check whether the vault is paused
Calculate risk metrics across all current positions
Check for emergency triggers (critical risk, drawdown breach, liquidity crisis)
Detect current market and portfolio conditions
Verify the minimum rebalance interval has elapsed
Evaluate available opportunities against the mandate's constraints
Propose an allocation based on strategy profile and risk-adjusted yield
Run a full compliance check against all mandate constraints
Generate an explanation of the reasoning
Determine whether the deviation warrants rebalancing
Execute, request approval, or hold based on compliance results
Strategy Profiles
The engine operates using strategy profiles that define the user's risk posture:
Defensive — focused on capital preservation and stability, favoring low-risk positions
Balanced — targeting risk-adjusted efficiency across the portfolio
Aggressive — tolerating higher volatility for potential upside
Profiles define boundaries and priorities. They do not execute trades automatically unless autonomous mode is enabled.
Risk Constraints
Risk constraints are explicit limits applied to every allocation decision:
Maximum acceptable Risk Score
Maximum protocol exposure per position
Maximum chain exposure
Minimum liquidity threshold
Maximum capital moved per rebalance
Drawdown tolerance
Protocol and asset allowlists
Constraints act as guardrails that prevent allocations outside acceptable risk boundaries. If any constraint would be violated, the proposal is rejected.
Allocation Suggestions
Based on the active profile and constraints, the engine generates allocation suggestions that may include increasing or decreasing exposure to specific strategies, rebalancing across protocols, reducing concentration in high-risk areas, or maintaining defensive positioning.
All suggestions are advisory by default and require user approval unless autonomous mode is enabled.
Human Oversight and Control
The Allocation Engine is designed with human oversight in mind. It does not execute trades autonomously unless the user explicitly enables auto-execution in the mandate. Users remain in control of strategy selection, constraint configuration, approval decisions, and the ability to pause at any time.
This design ensures accountability and transparency at every step.
The Allocation Engine is available from the Pro tier. Autonomous execution requires the Power tier.
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