A market stress test is an analytical exercise designed to evaluate the resilience of a financial system, market, or protocol under adverse economic or operational conditions. In the context of digital assets, it assesses how a blockchain, decentralized application, or token economy performs during extreme price volatility, network congestion, or security exploits. The goal is to identify vulnerabilities.
Context
Conducting market stress tests is increasingly important for assessing the robustness of decentralized finance (DeFi) protocols and stablecoins. These tests help identify weaknesses in smart contract logic, liquidation mechanisms, or oracle dependencies that could lead to systemic failures. Regulatory bodies are also considering stress testing frameworks for digital asset markets to ensure financial stability.
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