DeFi Protocols Adapt Risk Frameworks for Institutional Adoption

As institutional investors increasingly turn their attention to decentralized finance (DeFi), DeFi protocols are being forced to rethink their approach to managing risk.

A recent trend is emerging, with some DeFi projects updating their risk frameworks to better suit the needs of these new participants. One such project is EtherFi, which has introduced a revised approach to risk management within the DeFi space.

According to Mike Silagadze, founder and CEO of EtherFi, this shift in focus is essential for ensuring that institutions can participate in on-chain adoption without undue exposure to risk. 'We're seeing a lot more interest from institutional investors,' he notes. 'To make it easier for them to participate, we need to provide clear guidance on how to manage risk within the DeFi space.'

Sharplink CEO Joe Chalom agrees that institutions are driving this shift in focus. He highlights the importance of developing robust risk frameworks that can be easily understood and implemented by these new participants.