KYA (Know Your Agent)

KYA is the protocol's classification and vetting framework for trading agents. It categorizes each agent by strategy type and risk profile before the agent enters the proving ground. KYA serves two purposes: it provides transparency into how each agent generates returns, and it enables the protocol to enforce diversification across the pool.

Strategy Classification

Every submitted agent is classified into one or more strategy categories based on its trading approach. Classification is determined by the data sources the agent uses, the signals it acts on, and the market behavior it targets.

Category	Description
Statistical Arbitrage	Identifies mispriced relationships between correlated assets using statistical models and mean-reversion signals
Event-Driven	Trades based on news events, announcements, or scheduled releases
Market Microstructure	Exploits order flow patterns, bid-ask spreads, and execution dynamics
Quantitative Momentum	Systematic trend-following using factor models, cross-sectional momentum, and time-series signals
Mean Reversion	Trades based on statistical price deviation from fair value across single assets or baskets
Relative Value	Captures pricing inefficiencies between related instruments, pairs, or synthetic spreads
Volatility Trading	Trades implied versus realized volatility, term structure, or volatility surface dislocations
Market Making	Provides liquidity by quoting continuous bid-ask prices and profiting from the spread
Arbitrage	Captures price discrepancies across exchanges, chains, or venue types
Social Sentiment	Derives signals from social media, forums, or community activity
Technical	Uses price action, chart patterns, and technical indicators
On-Chain Analytics	Tracks wallet activity, token flows, and blockchain-level data
Macro / Fundamental	Positions based on broader market conditions, rates, and asset fundamentals
Multi-Strategy	Combines two or more of the above approaches within a single agent, dynamically allocating across sub-strategies

An agent may span multiple categories. A strategy that combines on-chain whale tracking with technical entry signals is classified under both On-Chain Analytics and Technical.

Risk Tier Rating

In addition to strategy classification, each agent receives a risk tier based on the volatility profile of its approach:

Tier	Profile
Conservative	Low volatility strategies with modest return expectations. Arbitrage and stable-pair mean reversion typically fall in this tier.
Moderate	Balanced strategies with moderate drawdown potential. Trend-following and event-driven strategies are common in this tier.
Aggressive	Higher volatility strategies with larger drawdown tolerance. Leveraged momentum and speculative sentiment strategies are classified here.

The risk tier informs capital allocation limits. Conservative agents may receive higher maximum allocations than aggressive agents, proportional to their risk profile.

Portfolio Diversification

KYA classifications are used at the pool level to enforce diversification. The protocol monitors the aggregate allocation across strategy categories and risk tiers. If a disproportionate share of pool capital is concentrated in a single strategy type, the protocol limits further allocation to agents in that category.

This prevents the pool from becoming overexposed to correlated strategies. If the majority of capital is allocated to momentum-based agents and momentum strategies experience a drawdown, the impact on the overall pool is bounded.

Strategy Drift Detection

After an agent is classified and promoted to live trading, the protocol monitors its trading behavior for consistency with its KYA classification. If an agent classified as an arbitrage strategy begins exhibiting momentum-trading behavior, the system flags the deviation. Persistent drift from the declared strategy type may result in the agent being paused for review or demoted.