# Security Council

The Security Council is a governance oversight role introduced to protect depositors against abnormal valuation movements. It manages the price-per-share guardrails, a set of on-chain bounds that constrain how much the vault valuation can change between updates.

This role exists to add an independent safety layer on top of the standard valuation flow, without interfering with day-to-day operations.

{% hint style="warning" %}
The Security Council can update guardrail parameters without restrictions. This role should be held by a trusted governance body, separate from the Curator and Vault Admin, to maintain effective segregation of duties.
{% endhint %}

### Responsibilities

The Security Council is responsible for:

* Configuring the upper and lower rate bounds that constrain price-per-share movements
* Activating or deactivating guardrail enforcement
* Monitoring valuation patterns and adjusting bounds when market conditions require it

### What the Security Council can do

<table data-view="cards"><thead><tr><th></th><th></th></tr></thead><tbody><tr><td><mark style="color:$primary;"><strong>Guardrails management</strong></mark></td><td><ul><li>Set the upper annual rate bound, limiting maximum price-per-share appreciation</li><li>Set the lower annual rate bound, limiting maximum price-per-share depreciation</li><li>Activate or deactivate guardrail enforcement on the vault</li></ul></td></tr><tr><td><mark style="color:$primary;"><strong>Valuation safety</strong></mark></td><td><ul><li>Prevent abnormal valuation updates from being applied at settlement</li><li>Provide an independent check on the valuation flow, separate from the Curator and Valuation Provider</li></ul></td></tr><tr><td><mark style="color:$primary;"><strong>Valuation override</strong></mark></td><td><ul><li>Propose a valuation that bypasses guardrail enforcement, used to exceptionally submit a legitimate valuation that falls outside the configured bounds</li></ul></td></tr></tbody></table>

### How guardrails work

Guardrails define an acceptable range for price-per-share changes between two valuation updates. The bounds are expressed as annual rates and scale proportionally based on the time elapsed since the last update.

At each valuation update, the protocol checks whether the proposed price per share falls within the allowed range. If the variation exceeds the configured bounds, the update is rejected.

{% hint style="info" %}
Guardrails are time-scaled. A vault with a 20% upper annual bound and daily valuations would allow roughly 0.05% appreciation per day. The same bound with weekly valuations would allow roughly 0.38% per week.
{% endhint %}

### Benefits for vault operators

Guardrails provide an extra layer of security on top of the standard valuation flow. Operators gain an independent on-chain check that limits the impact of erroneous or manipulated valuations, with parameters that remain visible and verifiable by depositors.


---

# Agent Instructions: Querying This Documentation

If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter:

```
GET https://docs.lagoon.finance/vault/roles-and-capacities/security-council.md?ask=<question>
```

The question should be specific, self-contained, and written in natural language.
The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.