# Decision Cycles A decision cycle is one complete evaluation-and-action pass performed by RaxBot. Each cycle follows a fixed sequence of steps and produces one of several possible outcomes. *** #### Possible Outcomes **Hold** — The current allocation is within acceptable parameters. No action needed. This is the most common outcome in stable conditions. **Rebalance** — Conditions have changed enough to warrant adjusting allocations. If the mandate allows auto-execution and compliance checks pass, the rebalance is executed on-chain immediately. **Pending Approval** — The proposed change is compliant but exceeds the approval threshold defined in the mandate, or auto-execution is disabled. The user is notified and must approve or reject. **Rejected** — The proposed allocation violates one or more mandate constraints. No action is taken. The violation details are logged. **Emergency Stop** — A critical condition has been detected. The vault is paused automatically. No human approval is required — this is a safety mechanism. **Paused** — The vault was already paused. The cycle logs this state and takes no further action. *** #### What Triggers a Rebalance A rebalance is triggered when any of the following conditions are met: * The vault has no current allocations (initial allocation required) * The current risk score exceeds the mandate's maximum allowed risk score * The deviation between current and proposed allocations exceeds the rebalance threshold *** #### Emergency Triggers Emergency stops are automatic and non-discretionary. They activate when: * Maximum drawdown is breached (current value has fallen too far from peak) * Risk score exceeds 150% of the mandate's maximum * Liquidity risk exceeds 85/100 When an emergency stop fires, the vault is paused on-chain. No deposits, withdrawals, or rebalances can occur until the pause is lifted. *** #### Cycle Frequency The minimum interval between cycles is configured in the mandate. Even if a cycle determines that rebalancing is needed, it will not execute if the minimum interval has not elapsed since the last rebalance.