Interconnectedness Mapping

Interconnectedness mapping is the practice of visualizing and analyzing the dependencies between various protocols, entities, and assets. By identifying where risks are concentrated and how failures could propagate, researchers can better understand the potential for systemic contagion.

This involves tracing the flow of capital through liquidity pools, lending markets, and derivative platforms. In an ecosystem where protocols are built on top of each other, the failure of a base-layer protocol can have catastrophic effects on all dependent systems.

Mapping these connections is essential for identifying "too big to fail" nodes within the decentralized financial landscape. It is a foundational tool for proactive risk management.