Introduction
A decentralized application that creates risk-adjusted financial products and informs users about their risk exposures in order to accelerate the adoption of digital assets.
We have three core products: 1. The risk engine, 2. Single-strategy investments vaults and 3. Aggregator vaults. The risk engine evaluates and organizes the crypto-risk of our single-strategy investment vaults. The platform then creates structured product vaults that aggregate investment strategies to match the exact risk profile of a user.
While risk is an inherent aspect of investing, it is important that both individual and institutional investors are not subjected to the risks associated with poorly constructed products and obscure risk assessment methods. Sector Finance aims to promote the widespread adoption of digital assets by developing innovative financial products and providing investors with information regarding their risk exposures.
Risks of Traditional Finance
Risks of Decentralized Finance
- Credit risk: the risk that a borrower will default on a loan or bond.
- Market risk: the risk that the value of an investment will decrease due to market fluctuations.
- Liquidity risk: the risk that an asset will be difficult to sell or that an investor will be unable to access their funds when needed.
- Operational risk: the risk of loss due to inadequate or failed internal processes, systems, or human error.
- Reputational risk: the risk that a financial institution's reputation will be damaged due to negative media attention or public perception.
- Regulatory risk: the risk of financial penalties or legal action due to non-compliance with laws and regulations.
- Smart contract risk: DeFi platforms often rely on smart contracts to automate processes and enforce rules. However, if these contracts contain errors or are exploited by hackers, it can lead to losses for users.
- Limited liquidity: Some DeFi assets may have limited liquidity, which can make it difficult to buy or sell them when needed.
- Hack/exploit risk: Decentralized platforms are vulnerable to hacking and other forms of cyber attacks, which can result in the loss of user funds.
- Lack of regulation: DeFi operates outside of traditional regulatory frameworks, which can make it difficult for investors to seek recourse if things go wrong.
- Volatility: DeFi assets and platforms can be highly volatile, which can result in significant losses for investors.
- Compatibility risk: DeFi platforms may not be compatible with all types of cryptocurrency wallets or other software, which can make it difficult for users to access their assets.
Risk-Adjusted Products
Risk Engine
Digital Assets
Building risk-adjusted financial products: By taking into account various risk factors and building structured product vaults that are adjusted for risk, Sector Finance aims to provide investors with a clearer understanding of their investment risk and a more comprehensive selection of products to address this risk.
Providing risk exposure information: By using a risk engine to score and categorize crypto-specific risks. Sector Finance aims to help investors better understand their risk exposures and make more informed investment decisions.
Promoting the adoption of digital assets: By building innovative financial products and providing information about risk exposures. Sector Finance aims to accelerate the adoption of digital assets by providing greater risk transparency.
Last modified 7mo ago