# Automation, safety parameters and backend security:

âTARS executes all operations through multisig wallet structure. It enforces protocol allowlists, pool-depth minimums, and oracle-parity checks to prevent adverse execution. Each rebalance is transparently logged on-chain, ensuring verifiability and minimizing discretionary human intervention.

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### Risk management:

atvPTmax follows a multi-layered risk framework designed to preserve capital, ensure liquidity, and sustain yield consistency. All allocations are governed by âTARS, which applies deterministic constraints at every stage, selection, execution, and monitoring.

#### 1. Pool Evaluation Criteria

Each pool is assessed against a defined risk framework before capital deployment:

* Withdrawal Liquidity: Instant withdrawal capacity is evaluated to ensure exit feasibility under stressed conditions.
* Price Impact (PI): Pools with low entry and exit price impact are preferred; high PI directly reduces net realized yield.
* Stablecoin Quality: Underlying assets must be established stablecoins (e.g., USDC, USDT, USDe etc.).
* Market Depth and Maturity: Pools must exhibit sufficient liquidity depth, and underlying assets must have high market capitalization, have >10-day maturity.
* Yield Source Integrity: Pools relying on off-chain yield generation mechanisms are classified as high-risk and excluded.
* Manual hard Exclusions: Any pool flagged as high-risk during manual filtering or failing minimum criteria is removed from consideration.

A dedicated risk-scoring process pools factsheets, protocol documentation, and yield mechanics to assign a quantitative risk score. Only pools exceeding the minimum score threshold are eligible for allocation.

#### 2. Investment Constraints

To control concentration and liquidity risk, the following allocation rules apply:

* Pool Concentration Cap: Investment in any single pool is capped at ≤10% of the pool’s total liquidity (TVL).
* Instant Withdrawal Cap: Where applicable, investment is limited to ≤10–15% of the pool’s instant withdrawal capacity.
* Diversification Requirement: Capital is distributed across a minimum of two pools.
* Liquidity Bias: At least 80% of total TVL is allocated to high-liquidity pools, pools backed by large-cap assets, or prime Pendle PT markets.
* Constraint Verification: ZK-based verification of allocation constraints is planned for on-chain enforcement.

#### 3. Continuous Monitoring and Exit Strategy

* PT & Market Surveillance: Principal Token positions and underlying markets are continuously monitored for adverse events, negative sentiment, or liquidity deterioration.\
  Yield Deviation Trigger: If realized or projected yield falls below the Pendle reference watermark, an automated exit is initiated.
* Route Optimization: The agent periodically scans Pendle markets for superior net expected yield opportunities, factoring transaction costs, maturity, and price impact, and rebalances accordingly.

#### 4. Execution Safety

* Every rebalance is pre-simulated.
* Execution is permitted only under risk-approved Price impact and Slippage.
* Oracle-parity checks validate fair pricing before transaction submission.

#### 5. Governance and Transparency

* Transactions are authorized via a 3-of-5 multisig.
* Every allocation, rebalance, and exit is recorded and published by âTARS in [Rebalance report](https://assets.aarna.ai/atvPtmax-allocations-report/atvPtmaxLatestReport.pdf) for full auditability.