Track12 lessons
Risk
Risk here stacks in separate layers - price, code, keys, counterparties, liquidity and law - and each layer fails in its own way.
01 — How to think about risk in digital assets
Risk here stacks in separate layers - price, code, keys, counterparties, liquidity and law - and each layer fails in its own way.
7 min
02 — Smart contract risk: what actually goes wrong in code
Defect classes, economic exploits and upgrade paths are the recurring shapes of on-chain loss, and an audit removes none of them completely.
8 min
03 — Oracle failure: when a protocol reads the wrong price
Lending markets and derivatives act on numbers imported from outside the chain, and the ways that import breaks are specific and repeatable.
8 min
04 — Bridge compromise: why cross-chain links keep failing
A bridge concentrates value behind a signing set or a verification contract, which has made bridges the highest-value target in the stack.
8 min
05 — Governance and admin keys: who can change the rules
Most protocols retain power to upgrade, pause or redirect value, and the practical question is who holds that power and what constrains it.
7 min
06 — Custody and self-custody, weighed honestly
Holding keys directly removes one category of risk and adds another, and the tradeoff is operational rather than ideological.
7 min
07 — Counterparty and exchange risk: the 2022 record
Terra, Celsius, Three Arrows and FTX failed within months of one another in 2022 through a small set of repeating mechanisms.
8 min
08 — Regulatory risk: the questions that remain unresolved
The honest description of regulatory risk is a list of open legal questions and their mechanical consequences, not a forecast of outcomes.
7 min
09 — Market and liquidity risk: price, depth and cascades
Price risk and the risk of being unable to transact near that price are separate problems, and the second one arrives during stress.
8 min
10 — Concentration risk in supply, stake and validators
A network can be decentralized in software and concentrated in practice, and ownership, operation and governance each concentrate separately.
8 min
11 — Data-quality risk: what a dashboard number can hide
Self-reported supply, adapter-dependent fee accounting, revisions and survivorship move headline figures before any market does.
8 min
12 — Personal security: phishing, address poisoning, approvals
The operational habits that prevent the most common losses: fake front ends, poisoned address history and standing token approvals.
7 min