Structural Risks are inherent vulnerabilities or weaknesses within the fundamental design or architecture of a system, protocol, or market. These risks are not merely operational failures but stem from the underlying framework, potentially leading to systemic instability, security breaches, or inefficiencies. In digital assets, this could involve flaws in a blockchain’s consensus mechanism, economic incentives, or governance model that could be exploited. Addressing structural risks often requires significant protocol upgrades or fundamental changes to the system’s design.
Context
Following major market events or protocol exploits, news analyses frequently identify structural risks as root causes, prompting calls for fundamental reforms. Debates often focus on the trade-offs between decentralization, security, and scalability in blockchain design, where optimizing one aspect can introduce structural weaknesses in another. Regulators and industry participants are increasingly examining these foundational risks to ensure long-term stability.
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