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The composability of the DeFi ecosystem implies that risks from an individual component flow into all dependent systems. Liquidity is at the heart of the Aave Protocol it enables the protocol's operations and user experience.
This documentation presents a framework to assess token risk for V3 of the Aave Protocol. The risk methodology considers market, counter-party, and smart contract risks for the tokens selected for the Aave Protocol, aiming to contribute to higher risk standards within DeFi.