DeFi risks can be evaluated using a 4-factor framework:

Code Audits – Check if projects undergo multiple audits (e.g., OpenZeppelin).

TVL & Liquidity – High TVL reduces rug pull risks.

Team & Governance – Anonymous teams pose higher risks.

Insurance Coverage – Protocols like Nexus Mutual mitigate losses.
Investors should diversify across battle-tested platforms (Aave, Uniswap) and avoid unaudited forks.

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great breakdown! always gotta keep an eye on those audits and team creds. also, can't stress enough the importance of insurance. diversify and stay safe out there! 🚀