How It Works
A look under the hood of the SovaBase platform.
How It Works
SovaBase manages DeFi exposure so you don't have to. We've automated the entire lifecycle of a conservative DeFi strategy.
The Architecture
Our system is composed of three main layers:
1. The Assessment Engine (The Eyes)
This off-chain system continuously monitors different protocols. It ingests data points like:
- Liquidity: Can we exit without issues?
- APY Volatility: How stable are returns?
- Utilization Rates: Is the pool on expected levels?
- Health Factors: Are borrowers over-leveraged?
It assigns a "Safety Score" to every potential venue.
2. The Policy Engine (The Brain)
This defines the rules of the road. It ensures we stick to our "boring" philosophy.
- Rule: Never allocate >40% to a single sub-protocol.
- Rule: Only use assets with >$10M TVL.
- Rule: Trigger rebalance if APY spread > 1.5%.
3. The Rebalancer (The Wings)
When the Brain detects an opportunity or a risk, the Rebalancer executes the transaction on-chain.
- Gas Optimized: It batches transactions to save costs.
- Non-Custodial: It interacts with the smart contracts, but never touches your private keys.
Rebalancing Triggers
We don't just move funds for fun. We move them when it matters.
| Trigger Type | Description | Example |
|---|---|---|
| Yield Optimization | Moving capital to a higher yielding (but safe) venue. | Move funds to different market if APY drops below 5%. |
| Risk Mitigation | Fleeing a deteriorating protocol. | A protocol's utilization hits 99%. We withdraw to prevent lock-up. |
| Liquidity Management | Ensuring funds are available for withdrawals. | Large withdrawal request comes in. We free up liquidity from the most liquid source. |
Automated Safety
In the event of a black swan event (like a stablecoin de-peg), our system is designed to "pause and protect," halting deposits and attempting to exit positions to safety.