Introduction
2 min read
Overview
Risk Adjusted Coin, or RAC, is a risk-adjusted index designed to allocate toward the strongest opportunities while reducing unnecessary portfolio risk.
It combines four core components:
- an algorithm that optimizes the basket
- a veto layer that adds human judgment where data is weakest
- an execution system that carries the portfolio into the market
- a security model that validates sensitive actions before they reach the contracts
Together, these pieces are meant to produce a portfolio that is dynamic, risk-aware, and operationally robust.
How RAC Works
RAC is not just a basket of assets. It is a system.
At a high level:
- The algorithm determines what the strongest risk-adjusted basket should look like.
- Governance can veto specific exposures when the community sees risk the model may miss.
- The execution layer turns those portfolio decisions into real portfolio changes.
- The security model constrains who can act and validates contract-touching transactions before execution.
Each of those layers matters. The algorithm improves the portfolio. Governance helps handle exceptions. Execution makes the system practical. Security makes the system safer to operate.
Start Here
The Algorithm
Learn how RAC estimates opportunity, measures volatility and correlation, and builds a portfolio that seeks the strongest outcome per unit of risk.
Veto
Learn how RAC holders can remove specific assets from the next basket when they believe the model is missing exceptional risk.
Trade Execution
Learn how RAC moves from one portfolio state to the next through a structured execution layer rather than naive market ordering.
Security
Learn how RAC reduces attack surface through closed participation, approved operators, simulation-first execution, and transaction validation before signing.
Why The System Is Layered
Most financial products stop at allocation. RAC goes further.
That is because real-world portfolio management is not only about picking assets. It is also about:
- responding to market regime changes
- handling events outside historical data
- moving capital safely
- reducing the chance that a dangerous action reaches execution unchecked
RAC is designed as a layered system because each of those problems is different. No single mechanism solves them all.
Summary
RAC is best understood as four connected systems working together:
- The Algorithm decides what the basket should be.
- Veto gives the community a way to remove exposures the model may underestimate.
- Trade Execution implements the transition from the current basket to the target basket.
- Security helps ensure that sensitive actions are constrained and validated before execution.
If you are new to RAC, the best reading order is: