What?

What is The Risk Protocol and what is its utility...

The Risk Protocol (“TRP”) is a novel DeFi primitive that tokenizes risk. Using synthetic options, we provide cutting-edge risk solutions that abstract away the complexity of the underlying derivatives. Investing and trading in crypto entails various kinds of risks – volatility, smart contract risk, regulatory, counterparty, liquidity etc. Our core purpose is to drive the evolution of decentralized finance by providing unique, tokenized next-generation risk solutions to address these various risks, within a defi framework. These risk solutions are designed to have utility for users across the risk spectrum, including both investors and speculators.

Our initial focus is on "harnessing" volatility. While volatility products are a $4 trillion + dollar sector in TradFi, the sector is in its infancy in crypto. Undisputedly though, volatility is several times higher in crypto relative to TradFi. It’s both a thornier challenge and a significant economic opportunity if it can be harnessed. The natural evolution of financial markets suggests that volatility is a $350 bil + opportunity in crypto.

We are harnessing volatility using SMART Tokens, a bold new DeFi primitive, geared to harness crypto volatility by offering different risk flavors of an underlying cryptocurrency, with no margin calls and no early liquidations. These SMART Tokens can split any crypto into different risk flavors. Traders and investors now have a choice as to what risk flavor of the underlying crypto they wish to own at any point in time. As market conditions change and trader sentiment changes, we anticipate traders and investors swapping between these SMART tokens to express their risk mode. As illustrated in the figure below, the rewards for picking the right SMART token over market cycles can be pretty astounding vs. simply holding the underlying cryptocurrency.