# Description

Sector's risk engine analyzes data to identify and assess risk for various investment strategies. The risk engine powers all of the investment products.

The risk engine... 

* Helps users make better-informed decisions about their investing activities
* Provides information about risks associated with specific protocols and crypto assets
* Informs the development of the risk-tranched vaults 

The biggest challenge in assessing risk in DeFi consists of accounting for black-swan-like events such as smart contract hacks and stable-coin de-pegs. This is similar to assessing insurance premiums for catasrophic events. We approach this task by estimating probabilites and associated losses for such events. 

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