defillama/defillama-skills/risk-assessment

Risk Assessment

Evaluate the risk profile of a DeFi protocol by examining its security history, oracle dependencies, treasury, fundamentals, and yield levels.

Workflow

Step 1 - Resolve the protocol entity

defillama:resolve_entity
  entity_type: "protocol"
  name: "<user-provided name>"

Step 2 - Hack history

Check whether the protocol has been exploited before.

defillama:get_events
  protocol: "<slug>"
  event_type: "hacks"

Any past hacks are a significant risk signal. Note the date, amount lost, and whether funds were recovered.

Step 3 - Oracle dependencies

Identify which oracle the protocol relies on and how much value it secures.

defillama:get_oracle_metrics

Filter results for the protocol's oracle. Oracle metrics automatically filter to tvl_component = 'base' and aggregate with SUM/GROUP BY to exclude double-counted TVL. A protocol using a small or unproven oracle has higher risk than one using Chainlink or Pyth.

Step 4 - Treasury health

Assess the protocol's financial reserves.

defillama:get_treasury
  treasury: "<slug>"

A healthy treasury provides a safety net for bug bounties, insurance, and continued development.

Step 5 - Protocol fundamentals

Check TVL, revenue, and trends to evaluate sustainability.

defillama:get_protocol_metrics
  protocol: "<slug>"

Key signals: Is TVL growing or declining? Is the protocol generating real revenue?

Step 6 - Yield analysis

Examine pool APYs for sustainability red flags.

defillama:get_yield_pools
  protocol: "<slug>"

Risk Signals

Evaluate each factor and assign a risk level:

Output Format

Present the report with these sections:

1. Risk Summary - Overall risk rating (LOW / MODERATE / HIGH) with

a one-sentence justification.

1. Security History - Hack incidents, amounts, and outcomes.
2. Oracle Risk - Which oracle is used, TVS secured, reliability.
3. Treasury Health - Total treasury value, composition, runway.
4. Fundamental Health - TVL trend, revenue, user activity direction.
5. Yield Sustainability - Are yields from real fees or emissions?
6. Risk Factors - Bullet list of all identified risk signals with

their severity level.

Tips

• No data from get_events for hacks is a positive signal, not missing data.
• A protocol with high TVL but zero revenue may be subsidizing usage

with token emissions - flag this.

• Compare treasury value to TVL: treasury < 1% of TVL means limited

ability to cover losses.

• Multiple past hacks on the same protocol is a stronger negative signal

than a single incident.