Risk Management

The Rio Network Risk Management subDAO is responsible for identifying, assessing, and mitigating risks across technical, operational, and financial areas to ensure resiliency of the Rio Network protocol as well as identifying, assessing, and selecting Actively Validated Services (AVS), Operators, and acceptable Collateral Types. The Risk Management subDAO then submits governance proposals based on these duties to the RioDAO for vote and final approval. This subDAO does not hold any funds.


The Risk Management subDAO consists of 3 to 5 interdisciplinary expert members who can evaluate risks and benefits across AVS selection, operator selection, technology, operations, finance, legal, regulatory, and insurance. Any member of the subDAO can create and propose governance actions to be voted upon by the RioDAO.

AVS Selection

A responsibility of the Risk Management subDAO of the RioDAO is to select AVSs that optimize reETH for a risk-adjusted return.

The Rio Network will analyze and vet each AVS before the subDAO initiates the proposal for vote by the RioDAO. In addition, a comprehensive summary of risks and opportunities will be formed and the AVS must pass a trial run on a testnet.

The Risk Management subDAO must then propose which AVSs to run and how much capital each AVS will receive through weights in the Rio Network. In addition, Rio Network AVS weight updates are proposed by this subDAO.

Finally, all AVS additions, activations and deactivations are put to vote whereby $RN token holders can veto changes and the Security Council subDAO also has veto power.

Operator Selection

An additional responsibility of the Risk Management subDAO is to select Node Operators.

Just like with AVS selections, the Rio Network will analyze and vet each Operator. Upon being vetted, the subDAO will propose the addition of the Operator to the RioDAO and the Security Council will have the opportunity to veto the Operator. Further the subDAO can vote to activate or deactivate existing operators.

Operator and AVS Asset Allocations

The Rio Restaking Router routes and rebalances delegations using the Operator Registry which allows for fine-grained asset allocations on a per-Operator basis. This lets the RioDAO gradually increase allocations to both new Operators and AVSs over time.

Collateral Type Selection

In association with the AVS and Operator selection duties, there is also a need for the subDAO to be able to control the asset mix that builds the underlying LRT products. This may pertain to various LSTs that are accepted into asset pools or other collateral needs that may arise over time.

The subDAO has been empowered to perform the following collateral type selection actions:

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