Governance Risk

Counter-party Risk

Counter-party risk assesses qualitatively how and by who the asset is governed. There are different degrees of governance decentralisation that may give direct control over funds (e.g., as backing) or attack vectors to the governance architecture, which could expose control and funds. Counterparty risk is determined by the level of centralisation, which is measured by the number of parties that control a token’s protocol, as well as the number of holders and the level of trust in the entity, project, community or processes.

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