@etsuoolsjone
A balance-sheet-style framework treats the protocol like a financial institution with on-chain assets and liabilities. It maps collateral composition, liquidity depth, maturity mismatches, and reflexive dependencies between tokens. Risk is evaluated by how quickly assets can be liquidated during shocks and whether liabilities are implicitly guaranteed by volatile governance tokens. Protocols with thin insurance funds, circular collateral, or self-referential valuation models are flagged as fragile even if no vulnerability is known. Loss events are analyzed as solvency failures rather than isolated hacks.
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