Blockchain systemic risk refers to the potential for a failure in one component or protocol within a blockchain ecosystem to trigger a cascade of failures across the entire system. This risk extends beyond individual project failures to threaten the stability and functionality of interconnected digital assets and decentralized applications. Such events can severely impact market confidence and operational continuity.
Context
Concerns about blockchain systemic risk are frequently raised in regulatory discussions and market analyses, especially following significant market downturns or protocol exploits. The debate centers on identifying vulnerabilities, such as highly correlated assets, shared infrastructure dependencies, or oracle failures, and developing mitigation strategies. Regulatory bodies and industry participants closely monitor indicators of interconnectedness and potential contagion.
Game theory proves private orderflow and latency asymmetries drive MEV-Boost to an oligopoly equilibrium, requiring new trustless orderflow mechanisms.
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