Protocol Fork Risk

Definition ∞ Protocol fork risk involves a blockchain splitting into multiple chains due to disagreements. This risk arises when a blockchain network faces the possibility of diverging into two or more independent chains, typically stemming from fundamental disagreements among its participants regarding protocol upgrades or significant alterations. Such a division can introduce market confusion, potential asset duplication, and systemic instability across the ecosystem. It tests the network’s consensus mechanisms.
Context ∞ News frequently covers discussions about potential protocol fork risks, especially during contentious upgrade proposals or ideological splits within a blockchain community. These events can significantly impact asset valuations and network security. The ongoing focus involves achieving stronger community consensus and developing more robust governance models to manage these existential threats.