Goals
- Maximize risk‑adjusted yield subject to liquidity, utilization and LTV constraints
- Minimize churn via gas‑aware thresholds and hysteresis
- Preserve user self‑custody and per‑Safe isolation
Constraints & Guards
- Slippage bounds per route and venue
- Utilization/LTV caps per market and per Safe
- Liquidity floors to ensure orderly exit
- Pause/roles checks enforced at the Safe (
architecture/safe-accounts)
Decision Process (High‑level)
- Gather venue signals (rates, liquidity, incentives) and on‑chain state
- Compute candidate allocations within configured bounds
- Compare expected benefit vs. costs (gas + slippage) and only act if net‑positive
- Package actions as an
ActionPlan (see SDK) and execute under guard checks
For the math behind scoring and constraints, see strategy/mathematical-models.
Policy Framework
Blend’s automation is guided by a clear framework designed to manage risk and optimize for sustainable yield.
Permissioned Markets Policy
- Target Utilization: Maintain ~80% utilization (within a 75-85% band) to balance borrow APR and supply yield.
- Stability Halts: New deposits are paused if the borrow curve becomes unstable or utilization cannot be maintained.
Reserve Policy
- Dynamic Sizing: The reserve size is adjusted dynamically based on utilization volatility and loop flow imbalance.
- Coverage: The reserve must cover user redemptions, rebalancing liquidity under stress, and flash loan capacity.
Rebalance Policy
- As-Needed: Rebalances are triggered when a live allocation deviates from its ideal weight by at least 1-3%.
- Gas-Aware: Execution only occurs if the expected APY improvement exceeds the amortized gas and slippage costs.
- Batching: Multiple small deviations are batched to improve gas efficiency.
This framework provides predictable, rule-based automation, removing emotion and maximizing efficiency within defined safety constraints.
