Methodology

Introduction
The Euler risk framework aims to do two things:
1.Maximise capital efficiency through borrowing and lending activity; and
2.Minimise risk and the probability of bad debts.
To achieve this, a methodology to stress test individual assets as well as simulate a portfolio of assets in tail risk scenarios.
Methodology
Ranking all available ERC20 tokens according to risk parameters:
1.Smart Contract Risk
2.Centralisation
3.Volatility
4.Liquidity
Additionally, assessing Oracle Risk
In order to arrive at:
1.Collateral Factor
2.Borrow Factor
3.Cross Tier Factor
Simulate risk scenarios to maximise borrowing and lending activity and minimise bad debts
Update factors and methodology through governance

Risk Factors

Asset Tiers

Last modified 19d ago

Export as PDF

Copy link

Outline

Introduction

Methodology