# Risk Framework ## Risk Framework With billions of locked assets, Decentralized Finance (DeFi) and Non-Fungible Tokens (NFTs) have boomed in recent years. The industry has been forming various standards to manage the emerging risks related to the hyper-connected ecosystem. Kyoko will be audited by 3-4 well-known audit firms as detailed in[ Security & Audits](https://docs.hasai.xyz/risk/security-and-audits). The following documentation analyses the fundamental risks of the protocol and describes the processes in place to mitigate them. A Kyoko Market Risk Assessment has been produced by the quantitative modeling team of Kyoko. The Safety Module have been stress tested via agent-based simulation. The simulations show that the model can remain solvent under extreme market conditions, exhibiting proper risk management. As a result, Kyoko provided some parameter suggestions to reduce insolvency risk further. If you have any questions, join us on Discord; our team and community members look forward to helping you understand risk management procedures. ### Asset Risk Asset Risk goes over the implications of adding a new asset. Kyoko's methodology quantifies the risks of each asset assessing its fit as well as the appropriate risk parameters. ### Liquidity Risk Liquidity Risk presents the liquidity risk mitigation strategies in place validating them by an analysis of the historical utilization of the protocol.