Risk Management in DeFi with Llama Risk | DAOs, WBTC, BitGo, and Regulatory Risks

Building Web3

In this thought-provoking episode of the Building Web3 Podcast, host Jax Dwyer is joined by Wormhole, the founder of Llama Risk, to delve into the complex and critical world of risk management in DeFi (Decentralized Finance) and DAOs (Decentralized Autonomous Organizations). With years of experience in crypto and decentralized protocols, Wormhole shares the story behind Llama Risk and how his team provides essential risk assessment services for some of the most prominent DeFi projects in the space, including Curve Finance and Aave.
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Chapters
00:00 Introduction to Llama Risk and Wormhole's Journey
04:02 The Evolution of DeFi and DAO Engagement
11:54 Understanding Risks in DeFi: The Role of Llama Risk
14:54 Analyzing New Protocols: Risk Assessment Strategies
22:00 Navigating Regulatory Risks: The Case of WBTC
34:05 Conclusion and Future Directions for Llama Risk
Llama Risk, a non-profit, community-led organization, specializes in evaluating the various risks associated with DeFi protocols, stablecoins, and pegged assets. In this episode, Wormhole explains how the company identifies and mitigates potential dangers across three key risk pillars: technology risks, counterparty risks, and market risks. Whether you're involved in DAOs or developing your own DeFi project, you'll gain invaluable insights into how these risks can affect both protocols and users.
Key discussion points in this episode include:
Llama Risk’s mission: How the company is elevating the standards for DeFi risk management, working with protocols like Curve, Aave, and Prisma Finance to ensure transparency, security, and informed governance decisions.
The growth of DeFi and how DAO-based governance systems are evolving, especially as tokenomic models like VTokenomics become more popular and complex.
The emergence of bribe markets within DeFi governance and the impact on decision-making processes. Wormhole shares real-world examples, including a governance crisis within Curve Finance involving a malicious actor attempting a takeover through inflated stablecoin minting.
How Llama Risk provided critical analysis and due diligence to help protect users from the fallout of such governance issues, offering lessons in how communities can better manage future risks.
Llama Risk, DeFi, DAO, Risk Management, Wormhole, Cryptocurrency, Governance, WBTC, Wrapped Bitcoin, BitGo, Regulatory Risks, Curve Finance, Aave, Wrapped Bitcoin, Bribe Markets, Tokenomics, Justin Sun, Due Diligence, Stablecoins, Pegged Assets, Counterparty Risks, Technology Risks, Market Risks, Liquidity Risks, Decentralized Finance, Proof of Reserve, BitGlobal, Transparency in DeFi, Asset Onboarding, Custodial Services, Web3