@tracys
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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