$400M has been lost to DeFi exploits in 2026. The 8 questions I ask before farming any managed yield product: #1 Hidden leverage or market exposure Is the protocol taking leverage with your deposits? Stream was managing $500M AUM on $160M of deposits. That math only works with excessive leverage. If a "stablecoin" is selling volatility or has any directional exposure, it's a hedge fund with a different label. #2 Real-time monitoring I'm paying a lot more attention to projects running Hypernative, Hexagate, or Chainalysis after Resolv. Automated threat detection and contract pausing would've mitigated a lot of that damage. #3 Audits and response to findings Multiple audits from different firms plus bug bounties are baseline. What matters more is how the team responded to critical findings. Nomad famously ignored Code4rena findings and got hacked for $200M. #4 First-loss protection Case by case, but for protocols with first-loss mechanisms (Avant, Royco, etc), who is protected, by how much, and under what circumstances? #5 RWA is higher risk Apart from sector leaders, I mostly avoid off-chain and RWA stables because I can't personally measure the counterparty risk. It's higher risk because the backing isn't onchain. #6 Backing and exposure Where does the yield come from? How are deposits managed? You're directly exposed to every underlying token and position the backing is deployed to. #7 Peg and redemptions How is the peg maintained? Are redemptions open or KYC-gated? How do the rules change in a crisis? #8 Liquidity How much DEX liquidity exists relative to circulating supply? This matters even more if the stable is borrowable on lending markets and redemptions are gated. One more thing: it's okay to leave yield on the table. Higher APY always has a price, you just don't see it until the protocol blows up.(Edgy - The DeFi Edge 🗡️)