Asset Management Protocol

Definition ∞ An Asset Management Protocol is a set of rules and software on a blockchain that facilitates the administration of digital assets. These decentralized protocols allow users to deposit, lend, borrow, trade, or pool various digital assets in a permissionless manner. They automate financial operations through smart contracts, reducing reliance on traditional intermediaries and enhancing transparency. Such protocols aim to provide secure and efficient mechanisms for managing digital wealth within the decentralized finance (DeFi) landscape.
Context ∞ Asset management protocols constitute a central component of the decentralized finance movement, frequently appearing in news related to innovation and risk. Discussions often focus on their total value locked (TVL), security audits, and governance models. Recent events have highlighted both the potential for high yields and the inherent smart contract risks associated with these autonomous systems.