Unit 4 · Level 3 · The DeFi risk stack

Boss: DeFi graduate

Code, oracles, and admin keys: the risks stacked under every APY.

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What you get asked

Boss round! In an AMM pool, the price of a token is set by:
Ratio in, price out, and every trade tilts the ratio. That's the whole engine of a DEX.
A pool holds 5 ETH and €10,000, so k = 50,000. A trader buys 1 ETH, leaving 4. The euro side must become 50,000 ÷ 4 = €12,500. How many euros did the trader pay?
€12,500 − €10,000 = €2,500 for one ETH against a €2,000 spot price. That's price impact in a shallow pool, computed like a pro.
A DeFi loan gets liquidated when:
No due dates, no reminders, just a line. Cross it and bots repay your debt for you, keeping collateral plus a penalty.
Match each League 3 concept to its meaning:
Four units, four traps: LP drift, disguised leverage, printed yield, and manipulable eyes. Recognize them and most of DeFi's disasters become predictable.
A new protocol offers 20% APY on stablecoins with no clear revenue source. History (Anchor, ~$40B) says:
Real fee and interest income rarely pays 20% on 'stable' money. When the source is invisible, you're the source.
Final question, graduate. Before depositing into ANY DeFi protocol, the full risk stack to check is:
That's the whole league in one line: know who pays the yield, who wrote the code, who feeds the prices, who holds the keys, and never bet more than you can lose. Congratulations, DeFi graduate. 🐜

Code, oracles, and admin keys: the risks stacked under every APY.