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How Is ‘Smart Contract Risk’ Different from ‘Market Risk’ for a Treasury Asset?

Market risk is price volatility; smart contract risk is the risk of loss due to a bug or exploit in the code holding the asset.
Greeks.Live12.11.25

How Is ‘Smart Contract Risk’ Different from ‘Market Risk’ for a Treasury Asset?

Market risk is the risk of loss due to changes in market factors like price volatility. Smart contract risk is the risk of loss due to a bug, exploit, or flaw in the underlying code of the protocol holding the asset.

A treasury holding ETH has market risk, but a treasury staking ETH in a third-party protocol also takes on that protocol's smart contract risk.

What Is ‘Impermanent Loss’ for a Liquidity Provider in a Smart Contract-Based DEX Pool?
What Are the Risks of Holding All Treasury Funds in a Single Smart Contract?
What Happens If There Is a Bug in a Smart Contract’s Code?
What Is the Role of Bug Bounties in Improving Smart Contract Security?

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