> ## Documentation Index
> Fetch the complete documentation index at: https://docs.rosetta.sh/llms.txt
> Use this file to discover all available pages before exploring further.

# Smart Allocation Logic

## Routing Logic

The Routing Logic determines how capital is allocated across vaults and lending markets. It answers: given the user's policies and current market conditions, where should funds be?

### Decision Inputs

The Router evaluates:

| Input                               | Source                            |
| ----------------------------------- | --------------------------------- |
| Current APY per vault               | Indexer (block-level)             |
| Current APY per Aave market         | Indexer (block-level)             |
| Post-deposit APY                    | Indexer (impact simulation)       |
| Available liquidity                 | Indexer                           |
| User's enabled vaults and protocols | Policies                          |
| Current allocation                  | Smart account state               |
| Chain context                       | Selected chain (HyperEVM or Base) |

### Signal Generation

Based on these inputs, the Router generates allocation signals:

* **Deposit signal**: Which vault or market should receive new deposits
* **Rebalance signal**: Whether current allocation should shift to a different vault or protocol
* **Hold signal**: Current allocation remains optimal

Signals are generated only when improvement exceeds minimum thresholds. The Router does not rebalance for marginal gains.

### Cross-Protocol Evaluation

The Router compares yields across protocol boundaries. An Aave supply market yielding 6% will be preferred over a Morpho vault yielding 5%, assuming both are enabled in user policies. The Router treats all enabled destinations as a single opportunity set.

### Execution

When a signal is generated:

1. Router validates action against user's policies
2. Transaction is submitted to user's smart account on the appropriate chain
3. Smart account executes on-chain (Morpho vault deposit or Aave supply)
4. Rosetta sponsors gas costs