> For the complete documentation index, see [llms.txt](https://docs.vishwalab.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.vishwalab.com/naro-btcvp-vault/risk-and-governance.md).

# Risk and Governance

### The layered operating model

BTCvp is governed through separation of duties:

* **Ciara (curator)** defines the approved strategy and risk framework - which strategies are allowed, how capital may be allocated, what limits apply.
* **Naro (AI coordinator)** operates the vault within that framework - monitoring, allocating, rebalancing, de-risking.
* **Veta (verification layer)** independently verifies every capital movement against the predefined constraints before execution.

No single component can move capital unilaterally. Custodied BTC remains subject to approved operational policies, risk limits, and verification rules at all times, and administrative controls remain subject to approved governance and operational procedures.

### Liquidation risk

The vault is built around market-neutral and delta-neutral strategies intended to reduce directional liquidation risk rather than take leveraged directional exposure. Leverage, venue, counterparty, liquidity, and risk limits are enforced by Veta on every action; Naro monitors positions continuously and can de-risk when predefined thresholds are reached.

### What can still go wrong

Risk-managed is not risk-free. Depositors should understand that:

* **Strategy risk.** Market-neutral strategies can underperform or lose money; APY figures are indicative, not promised.
* **Counterparty and venue risk.** Strategies execute on external venues within Veta's limits, but venue failure remains a possibility.
* **Custody risk.** Native BTC is held with Ceffu under operational policies. See Audits and Compliance for third-party audit reports.
* **Redemption timing risk.** The T+7 redemption notice period means BTC is not instantly withdrawable.

See Audits and Compliance for third-party audit reports covering the token contracts, circuits, and control layer.