Definition ∞ A risk engine failure occurs when an automated system designed to assess and manage financial risks within a protocol or platform malfunctions. This failure can lead to incorrect risk calculations, inappropriate liquidation events, or inadequate collateral requirements. Such an event can result in significant financial losses for users and instability for the protocol. It represents a critical security vulnerability.
Context ∞ Risk engine failures are a serious concern in decentralized finance, where automated systems manage substantial capital. News reports frequently detail incidents where flawed risk parameters or oracle attacks cause unexpected liquidations or protocol insolvency. Continuous auditing and robust testing of risk engines are essential for maintaining user trust and system integrity.
Blockchain Knowledge
Cryptocurrency Foundation
Cryptospace Newsfeed
