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Can a Financial Derivative Be Used to Hedge against Off-Chain Governance Risks?

Derivatives cannot directly hedge social risk, but can hedge the resulting price volatility using tools like put options.
Greeks.Live30.10.25

Can a Financial Derivative Be Used to Hedge against Off-Chain Governance Risks?

Hedging against off-chain governance risk is challenging because the risk is non-quantifiable and based on social consensus and developer intent. However, derivatives like futures or options could be used to hedge against the price volatility that results from a contentious off-chain decision.

For example, a put option could protect against a sharp price drop following a negative community vote.

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