# What? {% hint style="info" %} Last updated on 26/05/2026 {% endhint %} ## Building the Missing Risk Layer of Crypto The Risk Protocol (“TRP”) is building foundational *decentralized crypto risk infrastructure* and pioneering ‘**RiskFi**'—a novel vertical within DeFi that *turns risk itself into a programmable, tradeable financial primitive* Investing and trading in crypto entail various kinds of risks—volatility, liquidity, smart contract risk, regulatory risk, counterparty risk, etc. Our core purpose is to drive the evolution of decentralized finance by allowing traders to *price*, *tokenize*, *hedge,* and *trade* these various risk exposures. We do this by providing next-generation risk products designed not just to harness risk but also to exploit the unique alpha opportunities unlocked by these new primitives. These risk products are useful to both short-term traders and longer-term investors, for those who want to hedge risk and those who want to speculate on it. > #### *"Risk is one resource crypto has in abundance—yet it remains largely unharvested. The Risk Protocol lets users turn that risk to their advantage, transforming it from a problem into an asset. The Risk Protocol converts crypto’s greatest challenge into a new frontier of opportunity"* ## The Volatility Dilemma Cryptocurrency markets are famously volatile. While volatility can offer outsized gains, it also undermines the use of crypto as a stable store of value, collateral, or medium of exchange. Prices swing wildly, making it difficult for investors and everyday users to hold crypto confidently without fear of sharp drawdowns. Lacking a native risk-management layer, many investors flee to stablecoins (mostly backed by fiat) to escape volatility, ironically tethering themselves to fiat currencies. This reliance on USD-pegged assets runs counter to crypto’s ethos of decentralization and financial sovereignty. In short, *crypto has a risk problem—*enormous inherent volatility, but no dedicated, on-chain tools to see, trade, or hedge that volatility itself. This, then, is the first crypto risk we address— **volatility**. ## Risk Tokenization With Risk Tokenization, our initial product, we provide a crypto-native way to hedge or speculate on crypto volatility. We can split any cryptocurrency into different **SMART Tokens** that offer traders different *risk profiles of that cryptocurrency, with no margin calls or funding rates*. These SMART Tokens give traders and investors a choice of which risk profile of the underlying crypto they wish to own at any point in time. As market conditions and trader sentiment shift, we anticipate traders and investors switching between these SMART tokens to express their market expectations. As illustrated in the figure below, picking the right SMART token across market cycles can lead to massive outperformance relative to simply holding the underlying cryptocurrency. #### **Dynamically Shifting Between RiskON BTC & RiskOFF BTC**
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