Definition ∞ Asset-specific risks are dangers unique to a particular digital asset, distinct from broader market movements. These risks stem from factors such as a protocol’s code vulnerabilities, its operational design, or the specific regulatory environment surrounding that individual asset. Understanding these inherent characteristics is crucial for assessing potential price volatility and long-term viability.
Context ∞ News often reports on asset-specific risks when a project experiences a security exploit, a governance dispute, or a significant change in its underlying technology. Market participants closely monitor these individual risk profiles as they can directly influence an asset’s valuation and investor confidence, particularly within decentralized finance applications.
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