12. Risk Controls

Cerbero facilities require strict risk controls because the operator, capacity providers and synthetic market participants all rely on the integrity of facility state. If the covered portfolio can be changed arbitrarily or reporting is unreliable, the market becomes unpriceable.

Portfolio eligibility

Only approved portfolios should operate inside a Cerbero facility. Eligibility depends on game characteristics, provider integration, reporting quality, multiplier configuration, max bet structure and payout data availability. The purpose is to reduce adverse selection and ensure the market is pricing a known risk set.

Reporting integrity

Facility metrics require reliable data. Operators must provide covered activity, payout exposure, utilization, multiplier distribution, impairment-related data and provider-integrated reporting where available. If reporting becomes incomplete or inconsistent, supported exposure limits should be reduced or the facility should enter a restricted state.

Utilization and impairment controls

Utilization controls define how much covered exposure the facility can support before restrictions apply. Impairment controls define how the facility responds when Remaining Buffer deteriorates. These rules may trigger exposure throttling, multiplier restrictions, portfolio limitations or recovery-state constraints.

The purpose is not to eliminate variance. The purpose is to prevent uncontrolled deterioration and to make the facility state transparent enough for market participants to price.

Adverse selection controls

Adverse selection is one of the main risks in any operator-linked capacity market. Operators have more information about their traffic, promotions, VIP behavior and game mix than external capital providers. Cerbero must therefore define eligibility, monitoring and concentration controls before activation, not after stress appears.

Structural separation controls

The framework must maintain separation between real operator obligations and synthetic market exposure. Synthetic market activity cannot increase approved liabilities, alter impairment tolerances, modify utilization limits or expand facility exposure. Without this separation, the system would transfer speculative market leverage into the operator layer, which would be structurally unsafe.