Risk Assessment Framework

Why Risk Assessment is Needed

Comprehensive Evaluation: Assesses multiple risk factors including borrower profiles, asset volatility, and protocol risk.
Informed Integration: Helps builders decide which protocols to integrate with based on liquidity, rewards, and risk levels appropriate for specific use cases.
Portfolio Optimization: Provides valuable insights for portfolio managers and asset builders to optimize their strategies.

Parameters of the Risk Assessment Framework

Protocol Risk: Assesses the overall risk of different DeFi protocols based on their historical performance, security, and reliability.
Asset Volatility: Analyzes the price volatility of assets to assess potential risks.
Borrower Profiles: Evaluate the creditworthiness and risk associated with individual borrowers.
Ecosystem Analysis: Considers the broader DeFi ecosystem, including market trends and external factors that may impact risk levels.