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Hylo manages risk at the individual pool level. Each collateral pool (e.g. SOL, BTC) has its own collateral ratio (CR), the backing strength of its virtual stablecoin, and its own independent stability mechanisms. This page is the map; each mechanism links to its full treatment. vASSET CR=ASSET TVLvASSET Supply\text{vASSET CR} = \frac{\text{ASSET TVL}}{\text{vASSET Supply}}

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Rebalance Zones

A pool’s CR places it in one of six rebalance zones. The protocol targets a CR around 150%, the center of the healthy Neutral band; the further CR drifts from it, the more aggressively the protocol intervenes. The boundary rationale is derived in Value at Risk Analysis; the canonical zone definitions live in Hylo Equations.

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Multi-Tiered Stability

As CR leaves the Neutral band, Hylo escalates through complementary mechanisms, with market-incentivized rebalancing first, then protective fees, and finally the Earn Pool backstop:

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Risk Isolation

Because every pool has its own CR, zones, and fees, stress stays local: a shock to one collateral asset is worked out by that pool alone, without dragging healthy pools into protective mode. hyUSD stays backed because its collateral is the aggregate of all pools: a healthy pool offsets a stressed one. See Multi-Pool Risk Isolation for detail.

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Aggregate System Health

While each pool operates independently, hyUSD’s overall health depends on the aggregate: System CR=∑(Pool TVLs)∑(vASSET Supplies)\text{System CR} = \frac{\sum(\text{Pool TVLs})}{\sum(\text{vASSET Supplies})} hyUSD remains fully backed as long as total backing exceeds total vASSET supply.