Concentration Risk: Holding Everything in One Place
The simplest control available to any holder is also the least used. What splitting across venues actually buys.
Custody is the part nobody checks until it fails. These notes follow where assets sit, who controls the keys, what the terms actually say, and what happens on the day a withdrawal is refused.
The simplest control available to any holder is also the least used. What splitting across venues actually buys.
Delegating staking to the venue holding your assets adds three exposures that the advertised yield does not mention.
Most company multi-signature setups fail on staff turnover rather than on cryptography. Five provisions that prevent it.
Six searches through a terms document that take ten minutes and tell you more than any review.
Attention goes to exploits. Most customer losses have come from mundane failures of process and governance.
Two licences, two sets of obligations, and a difference that only becomes visible when something goes wrong.
The exposure is a withdrawal process that has never been tested at your size. Four things decide the answer.
Four kinds of report circulate and they differ enormously in what they examined. How to tell them apart.
Removing counterparty risk introduces operational risk, and for an organisation the second is harder to manage than the first.
Eight questions, answerable in writing, that separate a venue that has thought about custody from one that has not.
The composite pattern of how venue failures have unfolded, assembled from the public record of several.
The exposure is in the hot portion. What the published percentage means, and what makes it change without announcement.
The exposure is a chain of custody longer than the one disclosed. Your assets may sit two entities away from the venue you chose.
The exposure is discovering at the worst moment that your balance was an unsecured claim. What determines the ranking.
The exposure is assuming insurance covers your loss. Most policies cover a narrow set of events and a fraction of assets.
The exposure is that one person can move everything. Four arrangements, and what each one survives.
Withdrawal problems have preceded nearly every major venue failure. Which ones are routine and which are the signal.
The exposure is treating an asset snapshot as a solvency statement. The two differ in three specific ways.
Two sentences in the terms of service determine whether your assets are yours in an insolvency. Here is how to find them.
The exposure is that your balance is an entry in a database and the assets behind it are held somewhere you have not been told about.