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Affected Investment Objectives

This section defines the different investment objectives that a risk can negatively influence. Each objective reflects a specific priority for investors – from value preservation to operational safety or regulatory clarity.

A risk entry in the catalogue should specify:

  • Which objective(s) are at risk
  • The direction of effect:
  • [INCREASE] the metric rises in an undesirable way (e.g. [COST] increases = bad)
  • [DECREASE] the metric drops below the ideal (e.g. [TRUST] decreases = bad)
  • The target direction: whether the objective should ideally increase or decrease

Note: The model only tracks undesirable deviations from the expected or desired state.

Purpose and Use

The objectives model serves several key functions:

  • It links risks to investor priorities (e.g. value, access, reputation)
  • It simplifies risk scoring through thematic groupings of objectives
  • It helps design targeted measures that address specific threats
  • It supports intuitive UI elements like filters, badges, or dashboards

Objective Domains and Definitions

Financial Objectives

Risks that directly affect the economic quality or efficiency of an investment.

Objective Description Goal Example
[VALUE] Monetary worth of an asset in base currency. Increase Loss of value due to exploit
[YIELD] Ongoing returns such as interest or staking. Increase Yield erosion from overuse
[COST] Operational or transactional expenses. Decrease Gas fee spikes on Ethereum
[LIQUIDITY] Ability to exit or reallocate quickly. Increase Liquidity lock during volatility

Security Objectives

Risks that affect safety, accessibility, or resilience.

Objective Description Goal Example
[LOSS] Partial or full capital loss. Decrease Exploit drains protocol treasury
[ACCESS] Asset mobility and control. Increase Seizure of funds by authority
[DEPENDENCY] Exposure to external service reliability. Decrease Oracle provider downtime
[TRUST] Perceived system reliability. Increase Confusing or manipulated vote
[POTENTIAL] Long-term upside and optionality. Increase No roadmap or stagnation

Regulatory Objectives

Risks that influence legal certainty or reputational standing.

Objective Description Goal Example
[LEGAL_STATUS] Alignment with regulatory frameworks. Increase Protocol accidentally offers a security
[TRANSPARENCY] Clarity around governance or ownership. Increase Hidden roles in multisig

Connection to Measures

Every risk should be linked to one or more measures that specifically address the affected objectives:

  • Which objective(s) does the measure aim to protect?
  • What is the direction of correction or improvement?
  • Does the measure help restore the desired target state?

This supports:

  • Actionable decision-making
  • Scoring logic in automated tools
  • Communication of mitigation effectiveness

Implementation Tip

For dashboards: Highlight the top 1–3 affected objectives using tags or icons. Use color coding to signal direction of deviation (e.g. red for trust decreases).

For analysts: Group risks by objective domain (financial, security, regulatory) to improve alignment with strategy or audience.

For complete terminology, see Terminology. For risk categories, see Risk Categories.