Oh, the folly of man! Hacken, that paragon of wisdom, has unveiled a new scheme to assess the security, financial logic, and systemic risk of crypto yield products. A verifiable gauge of sustainability in volatile markets? 🤡💸
technical security, financial sustainability, and systemic dependencies. 🤯
The initiative follows the Hacken Trust Summit 2025 in New York, which brought together leaders from Nasdaq, Moody’s, S&P Global, Citi, JPMorgan Chase, and A100x to discuss the convergence of digital assets and traditional finance. 🎩🎩
Hacken positions the YRS as the first standardized metric allowing investors to gauge the safety and stability of yield-generating crypto protocols in a market still prone to high-profile failures. 🚨
How Hacken’s YRS addresses a $49 billion blind spot
Hacken’s push for this new metric is a response to what the firm terms a systemic failure that has cost investors billions. According to its own research, yield providers are the single most significant point of failure in the crypto ecosystem, accounting for a staggering 55% of all industry losses. 🤯
Their data indicates that 330 different yield protocols have collectively vaporized $49 billion over the past five years, a trend underscored by the recent $93 million collapse of Stream Finance. 💸💥
“Hacken’s Yield Audit introduces a new trusted layer – one that retail investors can rely on to make informed decisions and that institutional investors require to meet due-diligence standards,” the Hacken team said in the statement. 🤝
To build that trust, the Yield Risk Score dissects a project across three critical fronts. The first stage focuses on Security and Infrastructure, evaluating custody solutions, smart contract integrity, and operational security to produce a Technical Risk Score. 🔐
The second stage delves into Financial Sustainability, stress-testing the economic logic and yield sources to generate a Financial Sustainability Score. 💰
Finally, the framework examines Dependency and Systemic Risk, assessing vulnerabilities from oracles, cross-chain bridges, and custodians to output a Dependency Risk Score. 🌐
These three metrics are combined into a single, comprehensive YRS, reported on a familiar D-to-AAA scale. Beyond the score, Hacken provides continuous monitoring through its Extractor platform, allowing projects to maintain transparency without disclosing proprietary strategies. 📊
Hacken’s work builds on a track record of setting standards that protect the broader crypto ecosystem. After the collapse of FTX, the firm pioneered Proof of Reserves audits for exchanges, a practice now adopted by over 50 platforms to verify on-chain holdings. 🧾
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2025-11-10 19:18