Skip to main content

Protocol Principles and Risk Framework

This page describes the principles that guide AudaCity’s protocol design and the framework used to assess and manage risk across truck pools and operating partners.

Protocol principles​

AudaCity is designed around the following principles:

  • Yield is derived from real economic activity.
    Returns are generated from active logistics operations, not from token emissions or financial engineering.

  • Access to financing should be broad.
    The protocol is designed to support both large and small logistics operators, particularly in underserved markets.

  • Transparency is required at every layer.
    On-chain data, telematics, and revenue reporting are used to provide visibility into asset performance.

  • On-chain assets must have intrinsic value.
    Tokens represent ownership claims on income-generating, real-world assets.

Underwriting and risk framework​

AudaCity evaluates each truck pool and logistics partner before onboarding.
Underwriting occurs prior to pool creation and is repeated when material changes occur.

Operator qualification​

To be eligible, logistics operators must meet the following criteria:

  • Completed identity verification (KYC)
  • Demonstrated fleet management experience
  • Service-level agreement (SLA) performance above 90%
  • Verifiable historical revenue data

Truck pool criteria​

Each truck pool is evaluated using asset-level requirements:

  • Asset type: Class 7–8 commercial freight trucks
  • Active telematics and maintenance tracking
  • Revenue projections based on route characteristics, load type, and operator demand

Risk evaluation metrics​

AudaCity monitors the following performance indicators:

  • Revenue per kilometer and per delivery
  • Vehicle downtime rate
  • Fuel, maintenance, and insurance costs
  • Payment terms and operator solvency

Risk mitigation mechanisms​

To reduce downside risk, the protocol applies multiple controls:

  • Pool diversification to avoid single-truck exposure
  • Credit bond or insurance coverage where available
  • Service-level agreements with recourse clauses
  • Revenue escrow buffers
  • A token holder dashboard with real-time performance metrics

This framework is designed to protect investor capital while enabling logistics operators to access productive assets.

Audits and security​

All smart contracts will undergo external security audits and participate in bug bounty programs prior to mainnet deployment.