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Reference · Risk Fund & Shortfall

RiskFund.

Manages the protocol's risk reserves — a backstop for covering bad debt across isolated pools. Receives a configurable share of protocol income from PSR, consolidates it into a base asset, and funds shortfall auctions when called.

Overview

The Risk Fund receives a configurable share of protocol income via the ProtocolShareReserve. These funds are consolidated by swapping various tokens into a base asset (typically a stablecoin) using approved DEX routes. When a shortfall auction is triggered, the Risk Fund transfers the required assets to the Shortfall contract to compensate the auction winner.

This mechanism ensures the protocol maintains a financial buffer against insolvency events across all isolated pools.

Key functions

swapPoolsAssets​

Swaps accumulated pool assets in the Risk Fund into the base convertible token using configured swap routes.

function swapPoolsAssets(
    address[] calldata markets,
    uint256[] calldata amountsOutMin,
    address[][] calldata paths
) external returns (uint256);

transferReserveForAuction​

Transfers Risk Fund assets to the Shortfall contract to fund an active bad-debt auction.

function transferReserveForAuction(
    address comptroller,
    uint256 amount
) external returns (uint256);

setConvertibleBaseAsset​

Sets the target base asset that pool assets are swapped into.

function setConvertibleBaseAsset(address _convertibleBaseAsset) external;

getPoolsBaseAssetReserves​

Returns the current base-asset reserves allocated for a specific pool.

function getPoolsBaseAssetReserves(address comptroller) external view returns (uint256);
Access control

Swap operations and configuration changes are restricted to governance through the AccessControlManager.

ShortfallWhere Risk Fund assets get deployed→ProtocolShareReserveHow the fund gets capitalized→Risk Fund OverviewConceptual explanation→