Residual Exposure

Definition

Residual Exposure (RE) is the portion of gross obligation value that survives cycle cancellation and multilateral netting — the genuinely irreducible imbalance between domains for a given epoch.

RE = gross obligation value − cyclic exposure cancelled

What Happens Next

Residual exposure does not simply disappear; it is queued for liquidity rebalancing (14), which is the point at which physical capital movement, if any, actually occurs. RE is the number that determines how much of the network's economic activity ultimately required real capital displacement — see 24 · Capital Displacement Ratio.

Reading Residual Exposure

A domain carrying persistent residual exposure epoch over epoch is structurally imbalanced, not merely transiently so. This is visible directly in domain status (SURPLUS/DEFICIT) and is the primary operational signal used to prioritize rebalancing.