> For the complete documentation index, see [llms.txt](https://maxim-speransky.gitbook.io/doc/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://maxim-speransky.gitbook.io/doc/gitbook-overview.md).

# Overview

This framework governs market selection, capital allocation, exposure limits, and ongoing risk monitoring for two Morpho vault strategies. It is designed to preserve capital first and pursue yield only within explicit, independently assessed risk constraints.

Risk curation and capital allocation are distinct functions. Market selection, exposure limits, capital deployment, and monitoring follow the framework's eligibility and risk constraints.

## Live reference vaults

Two live Morpho vaults implement the Core and Enhanced Yield mandates. Access conditions are documented on each dedicated vault page.

| Vault                                                                       | Mandate        | Status |
| --------------------------------------------------------------------------- | -------------- | ------ |
| [Core Vault](/doc/gitbook-vaults/gitbook-core-vault.md)                     | Core           | Live   |
| [Enhanced Yield Vault](/doc/gitbook-vaults/gitbook-enhanced-yield-vault.md) | Enhanced Yield | Live   |

## Strategy mandates

Each vault is a self-contained mandate defined by its eligible universe, risk thresholds, exposure caps, and monitoring requirements. Yield is evaluated against comparable lending opportunities for the same loan asset, chain, and liquidity horizon.

### Core

The Core strategy is a capital-preservation mandate targeting yield comparable to established lending opportunities for the same loan asset. It admits only collateral and market structures that pass the framework's highest eligibility thresholds. Yield enhancement is not pursued through material increases in credit, liquidity, oracle, or structural-complexity risk.

### Enhanced Yield

The Enhanced Yield strategy targets a premium over comparable lending opportunities for the same loan asset. It may accept additional collateral, liquidity, maturity, or structural-complexity risk, but only when that risk is explicitly identified, independently assessed, and constrained through position caps. Limited PT-token exposure may be admitted under asset-specific and maturity-specific limits.

## Decision chain

![Risk decision chain](https://1710706561-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F1VN6zuCWqPKcpk4Gffy5%2Fuploads%2Fmezv8hLd91QmINTpPW0Q%2Fdecision-chain.svg?alt=media)

Disqualifying conditions are applied before scoring. An eligible asset must still pass the market assessment, and an eligible market must remain within the allocation and monitoring constraints of its strategy. No strong result at one layer compensates for failure at another.

## Operating principles

**Capital preservation before yield.** Decisions resolve in that order. Yield is pursued only inside the applicable risk mandate, never by overriding it.

**Independent risk layers.** Asset quality and market configuration are assessed separately. A strong asset cannot rescue a weak market, and a strong market cannot rescue an ineligible asset.

**Eligibility before ranking.** Hard exclusions are applied before numerical comparison. A score may rank eligible opportunities; it cannot make an ineligible position acceptable.

**On-chain constraints over operational promises.** Wherever possible, risk limits are enforced through transparent on-chain permissions, caps, and timelocks rather than an operator's stated intent. Monitoring and human intervention remain necessary, but they cannot override hard eligibility constraints.

**Asymmetric discretion.** Qualitative judgment is strictly subtractive: an analyst may reject a position that passes the model, but judgment alone cannot authorize one that fails it.

**Continuous eligibility.** Admission is not permanent. A position remains eligible only while its collateral, oracle, liquidity, concentration, and operational conditions continue to satisfy its mandate.

The scoring model behind these decisions is described in the [Risk Framework](/doc/gitbook-risk-framework.md).