# Risk Methodology: Introduction for Tokenised Assets in DeFi | Alex McFarlane at Pragma Lisbon 2026

- Channel: [ETHGlobal](https://streameth.org/ethglobal)
- Date: 2026-09-09
- Duration: 20:19
- Topics: ETHGlobal, Pragma Lisbon 2026, Lisbon, 2026, Alex McFarlane, Keyring Network, tokenised assets, DeFi risk, risk methodology, clearing houses, margin models, scenario analysis, LTV parameters, financial risk, tokenization, Pragma Lisbon, tokenized asset risk management, DeFi risk management, crypto risk framework, digital asset risk, DeFi lending risk, loan to value ratio, LTV risk parameters, DeFi governance, stress testing crypto, tail risk, counterparty risk
- Watch: https://streameth.org/watch/yt--A6Z0ACSx5E
- YouTube: https://www.youtube.com/watch?v=-A6Z0ACSx5E

## Description

Alex McFarlane, CEO of Keyring Network, introduces a disciplined risk methodology for tokenised assets in DeFi by drawing on lessons from clearing houses, bank regulation, derivatives, and past financial failures. He explains why credentials, ratings, historical performance, and apparently robust models cannot substitute for independent controls. Examples including AIG, Long-Term Capital Management, Lehman Brothers, and fragile clearing assumptions show how incentives, concentration, and model error can turn accepted practices into systemic risk. He traces the modern clearing framework through the Bank for International Settlements and standardized initial margin models, then asks which lessons should transfer to permissionless markets. Historical institutions accumulated rules after repeated crises, but rules can fail when the people setting ratings, collateral assumptions, or insurance prices benefit from optimistic outcomes. McFarlane uses these examples to show why transparency alone does not remove conflicts. A protocol can publish every parameter and still be unsafe if its governance process rewards the wrong behavior.

McFarlane focuses on practical safeguards for DeFi lending and tokenized markets: separate parameter setting from commercial pressure, test models outside the data used to calibrate them, examine tail events, and run transparent scenario analysis. He warns that insiders, issuers, or large counterparties may push for higher loan-to-value ratios that benefit them while shifting risk to a protocol. The takeaway is a governance-first approach in which assumptions are challenged, conflicts are visible, and risk parameters are designed for unfamiliar market conditions, not merely optimized to explain the past. The methodology emphasizes independent validation, robust data, and explicit limits on who can influence risk settings. Models should be calibrated on one period and challenged against separate market conditions. McFarlane cites scenario analysis around FTX, a major counterparty collapse, and shocks to DeFi rates, while arguing that macro stress such as a global financial crisis or private-credit selloff deserves more attention.

00:00 Introduction and Risk Quant Background
00:40 DeFi Lending as Automated Clearing
01:31 How Lending Risk Parameters Are Set
02:52 Three Centuries of Clearing Houses
03:28 BIS and Standard Initial Margin Models
04:06 Setting Haircuts for Different Assets
04:23 Applying TradFi Models to Tokenized Assets
04:44 When Risk Takers Mark Their Own Work
05:13 AIG, Lehman, and Financial Failures
05:36 How Clearing Houses Managed Lehman
06:07 Silicon Valley Bank and DeFi Stress
06:39 The Clearing House Default Waterfall
07:38 How Aave Followed the BIS Model
07:56 Fragility, Robustness, and Tail Events
08:18 The Meaning of Antifragility
09:18 Evaluating Proprietary Risk Models
09:42 Why Track Record Is Not Proof
10:08 Long-Term Capital Management Failure
10:48 Independent Validation After 2008
11:38 Monte Carlo Models and In-Sample Data
12:27 Testing Models on Unseen Conditions
12:53 Verify Instead of Trusting Models
14:10 Questions Before Depositing in DeFi
15:15 Commercial Pressure on LTV Settings
16:14 High LTVs and Counterparty Conflicts
16:52 Why Independent Parameters Matter
17:39 Conflicts From Skin in the Game
17:57 Scenario Analysis for Protocol Failures
18:24 Macro Risk and Private Credit Stress
19:07 Open Risk Methodology for Tokenized Assets
19:59 Closing Thanks and Takeaways

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _  

🇵🇹 *Pragma Lisbon 2026*
Pragma Lisbon 2026 was held on June 25th at the Carlos Lopes Pavillion in Lisbon, Portugal and was an in-person summit for builders and leaders in the web3 ecosystem. Watch the full Pragma Lisbon 2026 YouTube Playlist here: https://www.youtube.com/playlist?list=PLMxB4xW8JYdk

ETHGlobal's Pragma series takes place in cities around the world, and is designed to be a different kind of event. Pragma is a one-stage conference with founders-only on stage, bringing together a small group of curated attendees and speakers to discuss the future of web3 and reflect on the past. 

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _  

✅ Follow Alex McFarlane
X: https://x.com/flipdazed

✅ Follow Keyring Network
X: https://x.com/KeyringNetwork

✅ Follow ETHGlobal
X: https://x.com/ETHGlobal​
Warpcast: https://warpcast.com/ethglobal
Website: https://ethglobal.com
YouTube: https://www.youtube.com/@UCfF9ZO8Ug4xk_AJd4aeT5HA 

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _  

Are you interested in Ethereum development and entrepreneurship?
👉 Sign up for the next ETHGlobal event: https://ethglobal.com/events
🎁 Get exclusive access and perks with ETHGlobal Plus! https://ethglobal.com/plus
📣 Want us to throw an event in your city? Tell us where! https://ethglobal.com/city