Infrastructure
Risk Controls and Limits
Limits before positions. Monitoring before losses.
Risk in this business is not one thing. It is price, counterparty, protocol, chain, liquidity, operational and legal, arriving at different speeds and interacting. Wesvel’s framework sets a limit on each before capital is deployed, monitors exposure against every limit continuously, and separates the people who can trade from the people who can move assets.
The limit framework
Exposure is capped by strategy, by asset, by protocol, by chain, by venue and by issuer, with the caps derived from diligence rather than from opportunity. A position must fit inside every limit that applies to it. Limits are held in the systems that deploy capital, so that a trade which would breach one is not sent, and are reviewed on a schedule and on any material change.
Monitoring
Exposure against limits, collateral health on leveraged positions, distance to liquidation on derivatives, funding and basis across venues, protocol and chain status, and venue connectivity are monitored continuously by systems that alert and, within their parameters, act. Human review covers what the systems flag and the parameters they run under.
Separation of duties
Execution authority and withdrawal authority are held by different people under different approval chains. The systems that trade cannot add a destination address or move assets to one that has not been approved. Parameter changes, limit changes and policy changes are themselves logged, reviewed events.
Incident response
Each venue, protocol and strategy has a written response for the failures its diligence identified: pause, withdraw, hedge, unwind. Kill switches halt trading per venue and per strategy and are tested. Post-incident review feeds back into limits and parameters.
Practice
How Wesvel approaches it
- 01Limits per strategy, asset, protocol, chain, venue and issuer are enforced by the systems that deploy capital.
- 02Continuous monitoring with automated action within parameters, and human review of alerts and parameters.
- 03Execution and withdrawal authority are separated, and destination whitelists sit outside the trading function.
- 04Written incident responses and tested kill switches for every venue, protocol and strategy.
More in Infrastructure
- Custody ArchitectureHow fund assets are held: MPC key management, policy-enforced transaction governance, segregation, and where qualified custodians sit.
- Settlement RailsHow fiat, stablecoins and digital assets move on and off the book: regulated banking partners, on-chain settlement, and delivery-versus-payment.
- Valuation and NAVHow fund positions are priced, who calculates net asset value, and how the auditor checks it.
- Regulatory LandscapeThe regulatory developments that shape how an institutional digital asset manager operates: custody rules, stablecoin law, venue oversight and tokenized securities.