Risk Analysis

Definition ∞ Risk Analysis is the systematic process of identifying, assessing, and evaluating potential threats and their associated vulnerabilities to an organization or system. It involves quantifying the likelihood of adverse events and estimating their potential impact, providing a basis for informed decision-making regarding risk management. This analytical approach helps prioritize security measures, allocate resources effectively, and develop appropriate mitigation strategies. It is a continuous activity crucial for operational resilience.
Context ∞ For digital assets and blockchain technology, risk analysis is paramount due to the nascent nature of the industry, its rapid evolution, and the significant financial stakes involved. This includes evaluating smart contract vulnerabilities, market manipulation risks, regulatory uncertainties, and technological failures. News often covers security audits, post-mortem analyses of exploits, and evolving regulatory guidance as components of ongoing risk assessment within decentralized finance.