INSTITUTIONAL RISK ANALYSIS

Downside Risk,
Before It Becomes Performance

Independent stress testing and fragility analysis for funds exposed to crypto market structure.

We model what breaks first under stress—liquidity, correlations, liquidation paths, and assumptions—so your risk is explicit before markets force the conversation.

View Fund Risk Services →Rquest Custom Stress Test

Stress Scenarios

Correlated sell-offs., liquidity evaporation, oracle lag

Portfolio Fragility

Concentration, leverage, and hidden convexity

Methodology Review

Assumption audits and model failure points

Crypto Security Rests on Three Pillars

Cryptography and code prevent exploits.
Economic and liquidity integrity determine whether systems survive stress.

Cryptography & Mathematical Guarantees

What can be proven

Keys, signatures, and consensus rules define what should be secure under ideal assumptions.

This layer protects against invalid transactions — not market stress.

Code & Implementation

What can be audited

Smart contracts, protocol logic, and audits reduce implementation risk and prevent known classes of bugs.

This layer limits technical failure — not economic breakdown.

Economic & Liquidity Integrity (Frith Labs)

What fails under stress

Whether a system remains solvent, liquid, and coherent when markets move faster than assumptions.

  • Liquidity evaporates before price gaps
  • Liquidations cascade across positions and protocols
  • Solvency breaks at the protocol layer, not the asset level

Frith Labs focuses here.

We analyze economic stress, liquidity failure, and systemic fragility —before price reflects it and before losses become irreversible.

FLAGSHIP STRESS TEST

Deterministic Stress Testing for On-Chain Portfolios

We perform adversarial stress tests that model how on-chain portfolios fail under adverse market conditions.
Rather than forecasting returns, this analysis identifies failure paths, drawdown thresholds, and liquidity breakpoints—showing what breaks first, why it breaks, and how losses propagate when assumptions no longer hold.

This is a deterministic, read-only analysis designed for funds and protocols exposed to crypto market structure.

Portfolio value traced through sequential stress conditions, incorporating liquidity constraints, liquidation mechanics, and correlation regime shifts. Discontinuities reflect points where exits disappear and forced actions dominate outcomes.

Example Stress Test
(Public)

DeFi Pulse Index (DPI)

This public report applies our flagship stress test to the DeFi Pulse Index to demonstrate the analysis in full.

What was tested

DPI constituent assets and weights
Index-level exposure to correlated drawdowns
Liquidity conditions under forced selling

Stress scenario

DPI constituent assets and weights
DPI constituent assets and weights
DPI constituent assets and weights

What the analysis reveals

DPI constituent assets and weights
DPI constituent assets and weights
DPI constituent assets and weights
View Example Stress Test →
This report is representative of the analysis delivered to clients.