RiskModule
Risk Module is an abstract contract that needs to be implemented with specific policies for the main responsibilities of the contract: pricing and resolution.
The contract also stores several parameters that are used for the creation and validation of the policies.
Roles
The specific roles and functions of the contract are as follows:
| Role | Global* | Description | Methods Accessible |
|---|---|---|---|
LEVEL1_ROLE | High impact changes like upgrades or other critical operations. |
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LEVEL2_ROLE | Mid-impact changes like changing some parameters. |
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LEVEL3_ROLE | Low-impact changes like changing some parameters up to given percentage (tweaks). |
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RM_PROVIDER | Manages the risk module. |
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( * ) Global means that the role can be delegated to a user at the protocol level (for all components) or only for a specific component. Non-global roles can only be granted for a specific component.
Parameters
These parameters are managed and adjusted by the protocol governance. Some come from business decisions and others are quantitative analysis decisions.
| Field | Type | Description |
|---|---|---|
moc | uint256 (wad) | Margin of Conservatism. A factor used to scale the expected losses calculated as |
jrCollRatio | uint256 (wad) | The collateralization ratio up to the junior eToken (see Solvency Breakdown) |
collRatio | uint256 (wad) | The overall collateralization ratio (see Solvency Breakdown) |
ensuroPpFee | uint256 (wad) | Percentage applied to the pure premium used to compute the Ensuro Commision. |
ensuroCocFee | uint256 (wad) | Percentage applied to the cost of capital used to compute the Ensuro Commision. |
jrRoc | uint256 (wad) | Annualized return expected by Junior eToken liquidity providers for the capital exposed to these risks. See more details. |
srRoc | uint256 (wad) | Annualized return expected by Senior eToken liquidity providers for the capital exposed to these risks. See more details. |
maxPayoutPerPolicy | uint256 (amount) | The maximum payout that's allowed as payout for each individual policy of this risk module. |
exposureLimit | uint256 (amount) | The limit on the cumulative exposure of all the active policies of this module. |
maxDuration | uint256(hours) | The maximum duration of the policies (in hours). |
Packed parameters
To save gas, the parameters are stored in a packed struct that fits in 256bits (a word in the EVM). This is not visible externally, but put's limits on the precision of the parameters. The wad ones, have 4 decimals as precision, so 1.12345 will be truncated to 1.1234. maxPayoutPerPolicy has a precision of two decimals, and exposureLimit 0 decimals.
Internal methods
_newPolicy
Called from child contracts to create policies (after they validated the pricing)
| Name | Type | Description |
|---|---|---|
payout | uint256 | The exposure (maximum payout) of the policy |
premium | uint256 | The premium that will be paid by the policyHolder |
lossProb | uint256 | The probability of having to pay the maximum payout (wad) |
expiration | uint40 | The expiration of the policy (timestamp) |
payer | address | The account that pays for the premium |
onBehalfOf | address | The policy holder |
internalId | uint96 | An id that's unique within this module and it will be used to identify the policy |
External Methods
releaseExposure
Called when a policy expires or is resolved to update the exposure.
Requirements:
Must be called by
policyPool()
| Name | Type | Description |
|---|---|---|
payout | uint256 | The exposure (maximum payout) of the policy |
Setting parameters
Usually, LEVEL1_ROLE, LEVEL2_ROLE or LEVEL3_ROLE is requested for performing operations that change numerical parameters of the components. Both global and component role are accepted. If the user has LEVEL3_ROLE the changes might be restricted to small tweaks.
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