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Risk Optimization

Definition

Risk optimization involves systematically adjusting strategies to balance potential rewards with the likelihood of adverse outcomes. In digital asset management and decentralized finance, this refers to the calculated process of identifying, assessing, and mitigating various financial, technical, and operational risks while aiming to maximize returns. It includes diversifying portfolios, implementing robust security protocols, and utilizing hedging strategies to reduce exposure to market volatility or smart contract vulnerabilities. The objective is to achieve desired financial goals within acceptable risk parameters.