Listen to our latest episode featuring CORE3 and learn why risk in crypto is multidimensional, and why comparable risk scoring may be what unlocks institutional capital for DeFi.
In this episode, Nertila from Trading Strategy discusses with Dmytro from CORE3. CORE3 is a risk intelligence platform built to measure crypto risk so trust can exist across the industry. It describes itself as an independent analytics platform built around a data-driven Probability of Loss (PoL) framework that quantifies risk in Web3 projects, designed as voluntary, self-regulatory infrastructure to support institutional due diligence. Its site highlights a single comparable risk metric across all projects, assessed across six risk domains, giving institutions measured exposure they can underwrite, builders something to improve, and users a way to compare.
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Transcript:
Welcome to TradingStrategy.ai, the podcast where you can learn more about the essentials of DeFi trading in the new world. This is your go-to show for automated trading strategies and market insights. Welcome to the conversation. This is your host, Nertila.
Nertila: Hi everybody, welcome to today's podcast at TradingStrategy.ai. Today's guest is Dmytro from CORE3. Hello, Dmytro, and thank you for joining me today.
Dmytro: Hello. Thanks for the invitation. It's a pleasure to be here today.
Nertila: Let's get started with your background. How did you end up working in the crypto industry?
Dmytro: Sure. I have five years of experience in asset management — crypto-specific asset management, which is important — and nearly four years of experience in crypto risk and security. Currently, I'm a product director at the CORE3 platform, where we are building risk intelligence infrastructure for the crypto industry.
That basically explains how I ended up in crypto risk assessment and measurement. At first, I was working in digital asset management, only with crypto: trading activities, ICOs, basically everything the crypto industry offers you.
Risk is a vital part of any speculation or professional trading activity, because there is always a risk-reward ratio, and there has to be something that helps you build that risk factor. Eventually, I moved into a more analytical position at Hacken, where I joined the CER.live team. CER.live was the first risk scoring platform for centralized exchanges and has been running for more than eight years.
It helped me a lot to better understand risk exposure and the specifics of crypto, and it helped me build the expertise I believe I have.
Nertila: We'd like to know more about CORE3, the venture you're working for. What does your day-to-day look like?
Dmytro: Sure. I already mentioned CER.live, the Hacken sub-product I joined. It specialized in evaluating crypto exchanges and was the first risk scoring platform for centralized exchanges in crypto. It has existed for eight years, and for a while we were experimenting in other directions as well, because centralized exchanges were already covered.
We have a great understanding of all those processes, but of course the crypto industry is much bigger than that. So we started to explore other options — DeFi, wallet assessments, wider crypto projects, the DeFi industry in general — to understand the risk exposure, do the risk mapping, and figure out what we could offer the market to build better awareness of this factor.
CORE3 is the natural evolution of CER.live, which at the time was limited to evaluating centralized exchanges. CORE3 is our new answer to risk in the crypto market, and it's no longer limited to centralized exchanges.
We're planning to cover basically the whole crypto market and provide visibility and transparency into its risk posture. Of course, we're keeping CER.live's flagship solution for centralized exchanges. We've even developed a more advanced methodology and assessment framework that goes beyond security assessments and now also includes solvency evaluation and transparency assessment.
With the ratings line we're planning, we're aiming to cover the majority of the market that currently attracts interest: the wider DeFi sector, protocols, vaults, pools, assets — everything that might be interesting to end users, traders and investors, not only from this market but from traditional markets as well.
As for my daily routine, I'm exploring the challenges crypto risk currently faces and looking for answers to them: building the methodology and assembling the team to deliver the best solution as soon as possible.
Nertila: Very interesting. Where do you think profit and risk will accumulate in the future?
Dmytro: That's quite an interesting question, because I feel that risk, and especially malicious players, will always follow the money — they follow the capital. I like how you framed it: risk, profit and capital. We need to acknowledge that over the last few years, the major trigger for crypto market growth, for the bull market and the uptrends, was traditional finance adoption.
Partial adoption, or however you'd like to call it. If we look at the triggers that were proven and measured to have really influenced the moves we experienced, we're talking about ETF inflows and companies like MicroStrategy — now Strategy — aggressively buying Bitcoin, along with other similar companies buying different classes of assets.
Those were the prime triggers for the crypto market's growth. And what proves the point is that recently we've started seeing outflows from those ETFs, and there are no longer such huge purchases of Bitcoin and other assets by these treasury companies, as some people call them.
And we've experienced quite a significant downtrend. So, where capital and risk are moving at the moment: it's probably institutional money, traditional finance money. We need to understand what their area of interest is and what they're going to do in the crypto market, because the money and the risk will follow them.
At the moment, in my opinion, they're trying to engage through what feels most similar and familiar to them. We can see interest in different arbitrage strategies, so they're heavily involved in trading activities on centralized and decentralized exchanges and in the wider DeFi sector as well.
Those arbitrage opportunities also exist in liquidity provision, yield farming and associated activities. So, to sum up where capital and risk are heading: probably institutional, traditional finance money, and in terms of specific crypto areas, primarily the DeFi sector.
Nertila: What are some of the hard lessons you've learned so far?
Dmytro: I would say the hardest lesson is that in crypto, risk is multidimensional. Traditional finance and the traditional stock market are much simpler, because they're a mature market that has existed and evolved for more than a hundred years. They have a proper reporting system.
They have proper regulation. They have centralized governmental institutions that take care of reporting. So everything is quite transparent and clear, and you can understand where the risk will come from. Of course, there's some dependency on market conditions, but who doesn't have that?
We in crypto have it too. But beyond that, in traditional finance it's mostly related to business operations and business sustainability, and that's it. In crypto, risk is multidimensional because there are so many factors, so many different components of risk that can influence the final result and the final score.
It becomes really complicated to know what to prioritize and how to assess it in the best possible way. Let's explore an example to make my point about the multidimensional nature of risk a bit clearer. Take a hypothetical asset manager or retail user — it doesn't really matter which — who wants to take the stablecoins he stores in his cold wallet and allocate them to a liquidity protocol to earn some yield.
That's a great idea, right? That's what money is for. It should always be moving and working to give you some interesting returns. But this is exactly why I say risk in crypto is multidimensional: there isn't a single point of failure.
Once you decide you want to allocate your funds for yield, the general flow might look like this. I'll use simple examples to make the process easier to follow. You have the stablecoins you'd like to deposit.
Let's say it's USDC. You're already taking on risk exposure to USDC, to the stablecoin issuer itself. It might not look that dangerous, but we know USDC has a history of depegging. That happened a few years ago because of Silicon Valley Bank's financial troubles.
The depeg was quite significant, and it liquidated a huge number of investors and traders and caused lots of problems. So you can never be sure that risk at the asset level is zero, because it isn't. It's always some number. It might be low, it might have a really low probability of materializing, but it's never zero.
So we've just started, we're only at the asset level, and we already have risk exposure. Then we go to the protocol. Let's say Sky Protocol. Sky supports native stablecoin vaults that can bring you something around three and a half percent annually.
So what just happened is that you've selected a protocol to entrust your money to, and that protocol has a vault. That's two additional potential layers of risk. Again, I'm not trying to judge Sky or say it isn't safe to use. It's not like that at all.
I'm just trying to explain that there are so many layers of risk. You have the asset layer, the protocol layer, the vault layer, and the funny thing is that it's not even over yet, because there's always chain-level risk.
In this particular example, the Sky stablecoin vault operates on Ethereum mainnet. Of course, there's a minimal chance that something happens to Ethereum mainnet and people struggle to withdraw their money or run into problems.
But again, you can never be sure that it's zero. That's what I mean when I describe risk as a multidimensional thing with a complex nature. It's quite a hard lesson to learn, and an important one, because it helps you understand how you need to work in this market to build a clear picture of the risk exposure of any asset, protocol, vault, chain, whatever it is.
There's always a lot behind it. There's always a fairly complex, decentralized process that has to be properly assessed, and that is basically your risk exposure and your risk-reward ratio.
Nertila: That was quite a postmortem. The ecosystem has been plagued by lots of hacks. Where do we go from here?
Dmytro: That's exactly what we've just been talking about. You asked me where I think risk and capital are heading. This is basically the answer to why the DeFi sector is experiencing so many losses and attacks and so much attention from malicious players.
It's because this is the area with the most money in it. Of course, it's the most lucrative fruit for malicious players who want to steal some. And that's a real concern, because we can see a significant rise in the funds being stolen.
Looking at funds lost in 2025, we're talking about a little under 300 million dollars. In 2026 to date — and it's not a complete year yet, there are still four months to go — we already have 750 million dollars lost.
That's a 150% increase in activity, and that's considering the fact that last year was more profitable for people. There was more liquidity in the market, as we know from this year's prices of the major crypto indexes and assets — I'm not talking about the traditional market.
This year has even lower liquidity and lower exposure from retail investors, and maybe even institutional investors, though I'm not really sure about the latter. But it's still a fact that we have such a significant increase in funds lost.
That's also part of the risk picture we're trying to clarify. I think that really explains why we're seeing this kind of situation and this rise in DeFi-related attacks and hacks. Where we should go from here is quite difficult to answer, because, of course, we're all crypto enthusiasts.
We've all been here for some years already. We've spent a good portion of our lives in the crypto market, and we want to see it grow, mature and become a better version of itself. At the very minimum, you want a safe space where you don't lose money in the first place.
We're not even talking about making promised-land money. But to get to that point, lots of things have to happen. Regulation, for one — I think it's quite important, because we can already see the results of the first steps of regulation being implemented in different parts of the world.
We can already see a trend of fewer exit scams and rug pulls, because the risk-reward ratio simply isn't there anymore for those malicious actors. Previously, you could steal all the money you wanted with basically no punishment, because it was quite easy to hide somewhere and repeat the same shenanigans again and again while it worked.
Now they're really risking a lot, because there's some regulation in different areas of the world, and there's the CLARITY Act we're all waiting for, which should improve the general situation even further. Maybe it will also help with the hacks we've just been talking about.
But in general, that's only a tiny part of the picture. It might help with transparency and with some malicious actors. But overall, it's about the components of the crypto market, its participants: the projects and the protocols.
And we as the audience — I'm not speaking as the person developing risk intelligence infrastructure for the crypto market right now, but as a crypto enthusiast who has spent the last seven years here — we want to see a growing space.
We want to see accountable projects. We want to see transparency from their side. We want to see reporting. We want to see good security measures and good operational security practices, because the current level is nowhere near where it needs to be. There are tons of access control exploits and hacks where malicious players manage to get a protocol's private keys and steal all the money in its vaults or wallets.
These are terrible operational security practices, and they're not that difficult to manage and maintain properly. It's about organizing a proper process that meets certain standards. It's about transparency. These things have to be communicated, and the users of these protocols and projects need to be aware of the practices and mitigations used by the third party they're trusting.
So there isn't a single good answer to your question of where we go from here. Just as risk in crypto is multidimensional, the answer to this question is multidimensional too, because so many things have to change for us to see a better future for crypto.
It's not only about stopping the loss of funds here and there. It's not only about the hundreds of millions of dollars I just mentioned. It's also about global adoption and the market's growth, because the next big step for crypto is adoption by the global traditional finance system, since that's where the real money is.
It's the biggest holder of money in the whole world. And that money won't be allocated here until it's safe and until the risk is clear. So it's an important topic to understand, to raise, and to start working on collaboratively. From our side, of course, we're trying to address the other side of the question, because the first part of my answer explained the nature of risk in crypto, why it happens and who is primarily responsible for it.
But there has to be traction, proper navigation and comparability for the wider market that's waiting to enter the crypto space. We need to help them and show them comparable risk, so they can understand and navigate the general space of financial opportunities available to them.
That's the only way the crypto market can become competitive and interesting for them. It has many options, but as we discussed, you often don't understand what the risk is in your risk-reward ratio. And you can't assume the risk is what you expect it to be — it could actually be 100% — because you can only imagine what the reward side of the ratio is expected to be for the formula to work.
So from our side, we're trying to create a comparable framework, methodology and scoring system that sets out rules and an understanding of the crypto space: of protocols, vaults, assets. There's a lot to assess and a lot to shine a light on, to help people join us here.
Nertila: True, and I agree with you. In fact, that's another reason why I like the CORE3 project so much. Dmytro, what's next for you and for CORE3?
Dmytro: What's next? It's a good question, because we're currently building really hard. As I mentioned, we have a ready solution for centralized exchanges that has been improved and proven over years of experience. And these aren't just words: we've also built a project Probability of Fraud rating that covers the vast majority of projects listed on the top 50 centralized exchanges.
But right now we're more focused on niche, decentralized finance-related solutions that help people get an explicit understanding of the risk of protocols, of vaults — going back to the concept I explained earlier. There's the protocol level.
We're aiming to cover the whole protocol level: liquid staking, lending protocols, restaking, potentially RWAs. There's the asset level, of course: stablecoins, wrapped assets. And there's the pool level: vaults and liquidity pools in general.
Lots of things are expected to be released on our platform in the near future, and we're working really hard toward that. We already have something to offer the market, which is a great thing to have and to share. But we're really focused on more explicit, narrow solutions that guide participants who really need it in the specific areas where they expect to have exposure.
Nertila: Great. Is there anything else you'd like to tell our listeners?
Dmytro: The only thing I'd like to say is: never forget about the risk. You can do anything you like in crypto. Crypto offers lots of different opportunities — we all know that. But there's always that risk-reward ratio, and you can't afford to think only about the reward side, because risk is real.
We can see it, and we are measuring it.
Nertila: Dmytro, thank you so much. That was a very insightful conversation.
Dmytro: Thank you so much. It was my pleasure. Thanks for the invitation.