> For the complete documentation index, see [llms.txt](https://sector-finance.gitbook.io/sector-finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://sector-finance.gitbook.io/sector-finance/risk-engine/description.md). # 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.