> For the complete documentation index, see [llms.txt](https://elysia.gitbook.io/elusd/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://elysia.gitbook.io/elusd/risk-management/risk-control-framework.md).

# Risk Control Framework

The ELUSD protocol operates a risk control framework that combines spot and futures-based hedging to protect asset value against market volatility.

Hedge positioning adapts automatically to high/low Kimchi Premium regimes so that the overall portfolio remains delta-neutral at all times.

#### **Spot-Based Hedging**

Depending on premium regimes, the protocol switches between USDT↔USD across Korean exchanges and FX-hedging platforms to keep portfolio value denominated in USD, thereby enhancing stability.

#### **Futures-Based Hedging**

On global derivatives venues, the protocol maintains a KRW short (USD long) to offset FX fluctuations and uses measured leverage to improve capital efficiency.

#### **Integrated Risk Management**

This hedging architecture is not merely loss avoidance; it underpins yield stabilization and is a core foundation of the peg-maintenance mechanism.