DeFi has lost between $730M and $3.1B to exploits every single year since 2021. TVL has swung from $175B peak to $45B trough and back above $100B. The loss rate as a % of TVL is 1–3% / year depending on the cycle. I've been thinking about a simple metric to price this risk: the DeFi Security Premium Ratio (DSRP). DSPR = Security Spend / TVL. Reported quarterly. Both sides verifiable on-chain. Five tiers: Hardened (>1%) / Protected (0.5–1%) / Baseline (0.2–0.5%) / Underspending (0.05–0.2%) / Exposed (<0.05%) DSPR acts as a yield pricing input. Low DSPR = higher required yield to compensate LP for security risk. High DSPR = protocol earns a lower cost of capital. We need a ratings mechanism on chain to price yield Any protocol that is underspending in security needs to be called out and either spend more, divert more fees to an insurance fund, or both @Blockworks you should add it to the token transparency portal. but now do one for protocol health L1s should also carve out % of validator rewards or fees to DeFi protocols taking security seriously Need to think more about how to verify and create manipulation-resistant security spend receipts @_SEAL_Org - any ideas?
