Risk Quantification

Definition ∞ Risk quantification involves the process of assigning measurable values to potential risks within digital asset investments, blockchain projects, or market operations. This includes assessing the probability of adverse events and estimating their financial or operational impact. The objective is to provide a clear, data-driven understanding of exposure.
Context ∞ Risk quantification is a central concern for institutional investors and regulatory bodies engaging with cryptocurrency markets. Reports often discuss models for evaluating volatility, smart contract vulnerabilities, and liquidity risks. The development of robust risk quantification frameworks is essential for responsible participation and regulatory oversight in the evolving digital asset landscape.