# Asset Risk The composability of the DeFi ecosystem implies risks from an individual component flow into all dependent systems. Token are at the heart of Paddle's loan market as they enable operations and cash flow, and lay the foundation for assets/ liabilities structure of the whole financial system. To mitigate systemic risk, Paddle’s Risk Management Team has developed a Token Risk Assessment Framework. This evaluates each supported token based on: * Underlying asset quality and volatility * Counterparty risk * Market-level risks (e.g., liquidity, concentration, composability) Our goal is to maintain one of the highest risk standards in DeFi, ensuring only secure and reliable assets are integrated into the protocol. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.paddlefi.com/risk-framework/asset-risk.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.