AI and blockchain systems add a level of risk to the framework of financial risk management that can be categorised as new technological risks that organisations need to be aware of, and updated in the cybersecurity risk framework. It is imperative that financial risk management spans the entire life cycle, from conception to disposal. Oracle risksWithout oracles, a blockchain is entirely self-contained, and it is unaware of any events occurring outside of the local blockchain. Protocol governance risksA smart contract controls an application and is autonomous, so the only risk is related to its programming. In doing so, a new risk is introduced — governance risk — which is unique to the DeFi landscape.

Source: The Edge Markets June 25, 2022 04:22 UTC