Ojo is a Risk Management Network designed to prevent the next Terra collapse. We design risk engines: economic tools like DeFi apps, oracles, and economic models to help secure DeFi.
The Pendle Risk Engine is a smart contract used to price out Pendle PT tokens, which are used often by lending protocols to allow users to "loop" and increase their exposure to a particular asset. This particular design was commissioned by Morpho's DAO.
There are two ways to often price this asset: either by the trading price of the Pendle PT (using TWAP), or by taking the linear discount of the Pendle PT up until expiry. Curators may choose one or the other for different assets for different reasons. Our risk engine takes both of these as feeds and outputs the lower of the two. This prices the PT at the lowest possible value, which makes the experience better for the lender, and may reduce potential bad debt.
Disclaimer: No risk strategy can 100% protect against any type of attack. This risk engine should be considered a part of a broader risk strategy - we provide no warranty of effectiveness.
Our yield risk engine is designed to put a static cap on how much a yield asset can appreciate over time. It's designed to reduce risk exposure to inflation attacks where users are able to donate to an ERC-4626 vault and artificially increase the value of a vault token in order to borrow more against it. This type of attack happens quite frequently. The yield risk engine was designed in collaboration with Gauntlet.
Disclaimer: No risk strategy can 100% protect against any type of attack. This risk engine should be considered a part of a broader risk strategy - we provide no warranty of effectiveness.
Yield Risk Engine V1
Yield Risk Engine V1 was designed for non-compounding yield assets. As such, some folks may also use these for stablecoins to put a cap on the expected value.
Yield Risk Engine V2
Yield Risk Engine V2 was designed for compounding yield assets. It takes block time into consideration when calculating the cap price to output.
Our ERC-4626 adapter is a smaller contract that's used to overlay on top of an existing ERC-4626 vault, which will then output a chainlink-compatible price feed that can be used with common lending platforms.
Disclaimer: No risk strategy can 100% protect against any type of attack. This risk engine should be considered a part of a broader risk strategy - we provide no warranty of effectiveness.
Warning: Using this price feed alone may make your price feed susceptible to an inflation attack. Generally our users will use this in combination with one of our Yield Risk Engines.
