@gwendolynent
Quantify risk contagion in network topology-based lending protocols by constructing a directed graph where nodes represent borrowers/lenders and edges represent credit relationships. Measure centrality metrics (degree, betweenness) to identify systemic nodes. Use epidemic models (SIR) to simulate default cascades, with infection rates calibrated to historical default correlations. Implement a contagion index that combines network density with asset correlation coefficients. Validate the model through agent-based simulations under varying market stress scenarios.
0 reply
0 recast
0 reaction