# Limit engine (/invest/advanced/limit-engine)

The limit engine reviews a curator's proposed strategy for concentration, stressed losses and exit capacity. **Its review defaults are separate from limits enforced by the vault program.** A departure can require a recorded reason without being forbidden by the contract.

The defaults below describe rule set `limits-2026-10-06.1`. A saved strategy can override a review value with a reason. Check the strategy's actual values and acknowledged departures when reviewing a vault.

## Terms used by the review [#terms-used-by-the-review]

- **Book:** the strategy's total value, including idle cash. Allocation percentages below use this total unless stated otherwise.
- **Line:** one proposed investment allocation.
- **Originator:** the organisation behind the underlying exposure, looking through the token or venue. Different lines can share one originator.
- **Macro driver:** an economic dependency, such as the same source of borrower demand, that can affect several lines together.
- **Screening tier:** a source-registry eligibility classification. These A/B tiers are separate from Discover's A–E opportunity grades.

## Eligibility and concentration [#eligibility-and-concentration]

| Review rule | Default | Meaning |
| --- | --- | --- |
| Eligible sources | Screening tier A or B | Flags and source facts affect eligibility. A tier alone is not a guarantee. |
| Access and token restrictions | Review each flagged source | An asset allowlist, permanent delegate, transfer hook or unresolved legal note needs attention. This is separate from Akashi's allowlist of vault creators. |
| Venue capacity | At least 5% deposit-cap headroom and open to new allocations | A proposed new allocation needs room in the external venue. |
| One line | 8% standard cap with a separate 10% upper-bound review | These are two review thresholds, not two contract-enforced deposit limits. |
| Smallest line | 3% | Avoid allocations too small to be useful under the default review. |
| Single-borrower line | 4% | Limits one line whose repayment depends on one borrower. |
| One originator | 25% combined | Combine related exposures across lines. Idle cash is excluded from originator exposure. |
| One macro driver | 35% combined | Combine lines relying on the same economic driver. |
| One venue program | 35% combined | Limits shared program exposure. Spot-token lines are exempt from this particular rule. |

## Stress budget [#stress-budget]

For each line, multiply its portfolio weight by its assumed stress loss. Add the contributions to estimate the share of the book lost in the review scenario.

```text
Stress contribution = line weight × assumed loss on that line
Book stress loss = sum of the line contributions
```

Illustrative example: a 10% allocation with a 50% stress loss contributes **5% of the book**. A separate 20% allocation with a 25% stress loss adds another 5%. Together they contribute 10%, before the other lines are considered. These are scenario assumptions, not loss probabilities.

The allowed stress budget normally comes from a curve using weighted lending utilisation, bounded between 20% and 40%. When spot tokens exceed half the allocated book, or lending utilisation cannot be calculated, the default fixed budget is 25%.

This review budget is not the vault's live Junior coverage ratio or its premium curve. A strategy passing the review can still lose more than the scenario assumes.

## Exit capacity and cash [#exit-capacity-and-cash]

| Review rule | Default | Meaning |
| --- | --- | --- |
| Exit within one day | At least 25% of the book | Estimated sellable or withdrawable amount at the reviewed size and cost ceiling. |
| Exit within one week | At least 50% | Includes cooldowns and queues in the route assessment. |
| Sale cost ceiling | 0.6% for lots up to 1 million USDC | Above 1 million, it compares the available 1-million quote with a 2% ceiling. This is an approximation, not a quote for the full larger amount. |
| Idle USDC | At least 5% | Cash held outside investment positions for withdrawals. |

For a lot above 1 million USDC, the model reuses the available sale-cost estimate at 1 million. It does not directly measure the full larger exit. This limited quote ladder can overstate exit capacity for a large position, so inspect route depth separately.

These are strategy-review assumptions, not a promise that your own request will be paid within one day or one week. External queues, unavailable routes and contract funding conditions still matter.

## Triggers for review [#triggers-for-review]

Venue utilisation of 95% triggers review. 98% flags new deposits under the review rules. Less than 5% deposit-cap headroom also requires attention. Changes to a held reserve's loan-to-value ratio, liquidation threshold, cap, oracle or authorities can require another review.

The framework does not certify regulatory compliance. For contract controls, read [coverage and limits](/invest/advanced/coverage-and-limits). For the meaning of the underlying exposures, read [allocations and adapters](/invest/advanced/allocations-and-adapters).