Tag: DeFi Risk
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DeFi Risks: Operational Risks from Blockchains
DeFi apps depend on public blockchains to execute transactions and resolve contracts. Ethereum is currently the most popular base layer for DeFi, with approximately $46 billion in collateral used in its smart contracts. Other blockchains are also hosting DeFi apps and attempting to compete with Ethereum. However, the smooth operation of these apps relies on…
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DeFi Risks: Governance and Regulatory Risks
Decentralized Finance (DeFi) has ushered in a new era of financial innovation, promising greater accessibility and autonomy for users. However, as the DeFi ecosystem grows in complexity and scale, so do the associated risks. In this second part of our series on DeFi Risks, we delve into two critical aspects: Governance and Regulatory Risks. These…
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DeFi Risks: Paradox of DeFi
Decentralized Finance (DeFi) does come with its own set of challenges. Despite the promise of interoperability, DeFi has resulted in a concentration of nearly all projects on the Ethereum blockchain, introducing a new type of concentration risk. In the pursuit of removing human involvement and automating processes, new risks have arisen or existing ones have…