Glossary
This glossary defines key terms used throughout the RAX Protocol documentation.
Allocation Engine
The component of RAX responsible for generating capital allocation recommendations based on risk constraints, strategy profiles, and current market conditions.
AI Anomaly
A detected deviation from expected market, protocol, or liquidity behavior identified by RAX models. Anomalies may indicate stress, instability, or emerging risk but do not necessarily imply failure.
Alert
A notification triggered when predefined risk conditions are met, such as liquidity stress, volatility spikes, or oracle deviations.
Capital Allocation
The process of distributing capital across assets, protocols, or strategies based on risk, return, and constraint considerations.
Exposure
The degree to which capital is dependent on a specific asset, protocol, chain, or risk factor. Exposure measures concentration, not performance.
Global Risk Score
A normalized indicator representing the overall risk level of the monitored DeFi market at a given point in time.
Health Factor
A metric used to assess the safety of collateralized positions, representing the buffer before liquidation risk becomes critical.
Model Confidence
A measure of how reliable a risk assessment or simulation output is, based on data quality, scenario coverage, and model agreement.
Portfolio Risk Score
A normalized score representing the aggregate risk of a portfolio across assets, protocols, and chains.
Risk Score
A normalized value ranging from 0 to 100 used by RAX to represent relative risk levels, where lower values indicate lower risk and higher values indicate higher risk.
Risk-Adjusted Yield
A measure of return evaluated relative to the amount of risk taken, rather than absolute yield.
Simulation
A modeled scenario used to evaluate how assets or portfolios may behave under adverse or hypothetical market conditions.
Value at Risk (VaR)
An estimate of the maximum potential loss of a portfolio over a defined time horizon under normal market conditions, expressed with a confidence level.
Volatility
A measure of the magnitude and frequency of price or yield fluctuations over time.
TVL (Total Value Locked)
The total value of assets deposited in a protocol or strategy, often used as a proxy for liquidity and market participation.
RaxBot
An AI-powered agent built on top of RAX Protocol that provides ranked views of DeFi vaults using risk-aware metrics.
Important Note
Definitions in this glossary are provided for clarity and consistency. They are intended for informational purposes only and do not constitute financial advice.
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