What ?

What is The Risk Protocol and what are we building...

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 entails various kinds of risks – volatility, liquidity, smart contract risk, regulatory, counterparty 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 that are designed not just to harness risk, but to also exploit the unique alpha opportunities unlocked by these new primitives. These risk products have utility for both short-term traders as well as longer term investors, for both those that 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 decentralisation 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 flavors of that cryptocurrency, with no margin calls and no liquidations. These SMART Tokens give traders and investors a choice as to what risk flavor of the underlying crypto they wish to own at any point in time. As market conditions change and trader sentiment changes, we anticipate traders and investors swapping between these SMART tokens to express their risk mode. As illustrated in the figure below, picking the right SMART token over market cycles can lead to massive outperformance vs. simply holding the underlying cryptocurrency.

Dynamically Shifting Between RiskON BTC & RiskOFF BTC