Potential risks and ways to minimize their consequences
If anything can go wrong it will go wrong.
Murphy's Law
Venture capital investment involves many different risks, but modernity provides many effective ways to hedge them, and in some cases completely prevent negative consequences. The table presents the main risks of the Open Galaxy DAO, their sources and treatment / prevention measures.
Change of Project priorities
Risk type (external / internal): internal Risk owner: project team Consequences of a hazardous event (I): 2 The probability of a HE (L): 0,5 Risk assessment (I × L): 1
Proposed risk treatment arrangements:
general meeting of the team to determine the best methods for the required changes, clarification of the calendar and financial plan
identification and active use of various operational indicators to prevent abrupt transformations of the Project priorities
Changes in the requirements for the Project
Risk type (external / internal): internal Risk owner: investors, project team Consequences of a hazardous event (I): 1 The probability of a HE (L): 0,2 Risk assessment (I × L): 0,2
Proposed risk treatment arrangements:
identification of new most promising areas, setting new goals and determining the best
methods to achieve themgeneral meeting of the team to determine the methods, clarification of the calendar and financial plan
Lack of team engagement
Risk type (external / internal): internal Risk owner: СЕО, HR Consequences of a hazardous event (I): 3 The probability of a HE (L): 1 Risk assessment (I × L): 3
Proposed risk treatment arrangements:
conducting team building events
options as a reward system for employees
Insufficient communication between the stakeholders of the Project
Risk type (external / internal): internal Risk owner: COO, PR Consequences of a hazardous event (I): 3 The probability of a HE (L): 1,5 Risk assessment (I × L): 4,5
Proposed risk treatment arrangements:
creation and regular updating of several information channels (website, telegram channel, instagram, Facebook, VK, twitter, etc.)
the contacts of the head of the press service are published in the public domain, and most of the communication is carried out through it in accordance with the adopted media policy
to organize and maintain a channel of direct communication between users and creators of the Project (for example, monthly direct lines with the management on YouTube)
Poor project documentation
Risk type (external / internal): internal Risk owner: CTO, legal Consequences of a hazardous event (I): 2 The probability of a HE (L): 2 Risk assessment (I × L): 4
Proposed risk treatment arrangements:
independent audit of legal agreements
conducting regular audits of technical documentation and licensed code purity
allocation of a structural unit for design and documentation
Illness (dismissal, death) of a key Project employee
Risk type (external / internal): internal Risk owner: CEO, HR Consequences of a hazardous event (I): 4 The probability of a HE (L): 3 Risk assessment (I × L): 12
Proposed risk treatment arrangements:
maintaining code repositories with specific access policies
allocation of funds from the force majeure fund to compensate the consequences for the employee and his relatives
maintaining project documentation in accordance with accepted standards
creation and implementation of a policy of daily backup of key project information and preservation of hard copies
HR activities to avoid bus-factor <2
Lagging behind the schedule of the Project
Risk type (external / internal): internal Risk owner: CEO, COO Consequences of a hazardous event (I): 2 The probability of a HE (L): 2,5 Risk assessment (I × L): 5
Proposed risk treatment arrangements:
identifying the causes of delays, identifying needs to eliminate them
bonuses for overtime work of employees
allocation of funds from the force majeure fund for hiring additional personnel
Project infrastructure design error
Risk type (external / internal): internal Risk owner: project team Consequences of a hazardous event (I): 3 The probability of a HE (L): 0,1 Risk assessment (I × L): 0,3
Proposed risk treatment arrangements:
Independent expertise of the Project infrastructure from rock-star experts
Error in the program code of smart contracts of the Project
Risk type (external / internal): internal Risk owner: CTO Consequences of a hazardous event (I): 3 The probability of a HE (L): 0,2 Risk assessment (I × L): 0,6
Proposed risk treatment arrangements:
independent external double audit of the skin of smart contracts released in prod
error risk insurance with help of DeFi
bug-bounty program
Error in the program code of the Project website / marketplace
Risk type (external / internal): internal Risk owner: CTO Consequences of a hazardous event (I): 2 The probability of a HE (L): 0,2 Risk assessment (I × L): 0,4
Proposed risk treatment arrangements:
independent audit of the program code of the site and marketplace
error risk insurance through DeFi
bug-bounty program
Technical failure, crash of the Project website / marketplace
Risk type (external / internal): internal Risk owner: CTO Consequences of a hazardous event (I): 2 The probability of a HE (L): 0,1 Risk assessment (I × L): 0,2
Proposed risk treatment arrangements:
SLA with clearly defined procedures and fixed in contractual documents
creation and implementation of a policy of daily backup of key project information and preservation of hard copies
error risk insurance with help of DeFi
risk insurance in conventional insurance
Bankruptcy (or exit scam) of a partner exchange
Risk type (external / internal): external Risk owner: COO, legal Consequences of a hazardous event (I): 3 The probability of a HE (L): 0,5 Risk assessment (I × L): 1,5
Proposed risk treatment arrangements:
careful study of partner documentation, formalization of risks and responsibilities
risk insurance with help of DeFi
Technical failure, accident at the partner exchange
Risk type (external / internal): external Risk owner: COO Consequences of a hazardous event (I): 3 The probability of a HE (L): 1 Risk assessment (I × L): 3
Proposed risk treatment arrangements:
SLA with clearly defined procedures and fixed in contractual documents
Targeted financial attack (manipulation of the price of the Project's management token)
Risk type (external / internal): external Risk owner: CEO, COO Consequences of a hazardous event (I): 3 The probability of a HE (L): 3 Risk assessment (I × L): 9
Proposed risk treatment arrangements:
clearly defined procedures and procedures for employees in case of force majeure situations
Lack of industry experts for some projects placed on the marketplace
Risk type (external / internal): internal Risk owner: CEO, COO, HR Consequences of a hazardous event (I): 2 The probability of a HE (L): 4 Risk assessment (I × L): 8
Proposed risk treatment arrangements:
preliminary internal examination does not allow the project to be peer reviewed in the absence of a quorum of experts in the direction declared in the project
Poor expertise of projects placed on the marketplace
Risk type (external / internal): internal Risk owner: COO, HR Consequences of a hazardous event (I): 2 The probability of a HE (L): 3 Risk assessment (I × L): 6
Proposed risk treatment arrangements:
regular analysis (of all parameters) of startups and adjustment of their assessment models
parametric assessment of startup risks (according to IC standards)
investment risk insurance with help of DeFi
Lack of guarantees for reimbursement of losses of the clients of the Project
Risk type (external / internal): internal Risk owner: COO, PR Consequences of a hazardous event (I): 2 The probability of a HE (L): 4 Risk assessment (I × L): 8
Proposed risk treatment arrangements:
legally justified disclaimer of guarantees for anonymous customers
legally justified KYC / AML procedures for clients from certain jurisdictions or refusal to service them
risk insurance with help of DeFi
Lack of regulatory framework for the Project in most jurisdictions
Risk type (external / internal): external Risk owner: CEO, legal Consequences of a hazardous event (I): 3 The probability of a HE (L): 2 Risk assessment (I × L): 6
Proposed risk treatment arrangements:
the use of the DAO form allows you not to limit the activities of the Platform to any jurisdiction and compliance with any rules and regulations, except for your own, published on the Platform's website and voluntarily accepted by any user of the Platform to interact with it
Current legal uncertainty in the regulation of cryptocurrencies / virtual assets (in the future, it is possible to ban transactions with them)
Risk type (external / internal): external Risk owner: CEO, legal Consequences of a hazardous event (I): 3 The probability of a HE (L): 2 Risk assessment (I × L): 6
Proposed risk treatment arrangements:
the platform, in fact, is a decentralized application, exists in the blockchains ETH, BSC, Polygon, etc., accordingly, the risk of imposing any responsibility for the use of this system is transferred to the end user
High volatility of major cryptocurrencies
Risk type (external / internal): external Risk owner: CEO, COO Consequences of a hazardous event (I): 2 The probability of a HE (L): 4 Risk assessment (I × L): 8
Proposed risk treatment arrangements:
using both DeFi / P2P and CeFi liquidity mechanisms (through partnership agreements with exchanges)
using both DeFi / P2P and CeFi liquidity mechanisms (through partnership agreements with exchanges)
Hacker attack
Risk type (external / internal): external Risk owner: CTO, COO Consequences of a hazardous event (I): 3 The probability of a HE (L): 3 Risk assessment (I × L): 9
Proposed risk treatment arrangements:
SLA with clearly defined procedures and fixed in contractual documents
clearly defined procedures and procedures for employees in case of force majeure situations
Raider attack
Risk type (external / internal): external Risk owner: CEO, COO, legal Consequences of a hazardous event (I): 2 The probability of a HE (L): 1 Risk assessment (I × L): 2
Proposed risk treatment arrangements:
measures that make non-collegial decisions in the Project impossible (for example, the use of multisignature to initiate a number of financial actions)
clearly defined procedures and procedures for employees in case of force majeure situations
Prohibition of activity in certain jurisdictions due to the lack of standard KYC / AML procedures
Risk type (external / internal): external Risk owner: CEO, legal Consequences of a hazardous event (I): 3 The probability of a HE (L): 2 Risk assessment (I × L): 6
Proposed risk treatment arrangements:
due to the fact that the platform is a dapp, we can carry out these procedures in case of our own interest. In all other cases, all responsibility is transferred to the end user
Difficulty (impossibility) of bringing unscrupulous counterparties to justice
Risk type (external / internal): external Risk owner: CEO, legal Consequences of a hazardous event (I): 3 The probability of a HE (L): 2 Risk assessment (I × L): 6
Proposed risk treatment arrangements:
creation of a security service (or outsourcing services to a world famous brand)
multisignature procedure for all financial transactions in DAO and in projects where an independent auditor plays one of the roles
Incorrect dismissal of a key employee of the Project team
Risk type (external / internal): internal Risk owner: CEO, COO, HR Consequences of a hazardous event (I): 2 The probability of a HE (L): 0,5 Risk assessment (I × L): 1
Proposed risk treatment arrangements:
changing the termination procedures based on the experience gained
allocation of funds from the force majeure fund to compensate for the consequences
Leakage (for example, as a result of theft of a medium) of information with limited access
Risk type (external / internal): external Risk owner: CEO, COO, HR Consequences of a hazardous event (I): 3 The probability of a HE (L): 0,1 Risk assessment (I × L): 0,3
Proposed risk treatment arrangements:
carrying out measures to prevent such cases in the future (prohibition on the use of personal equipment in the office, tightening control over access to key data, etc.)
Scandal related to unethical behavior of key persons of the Project
Risk type (external / internal): external Risk owner: CEO, HR Consequences of a hazardous event (I): 3 The probability of a HE (L): 0,1 Risk assessment (I × L): 0,3
Proposed risk treatment arrangements:
allocation of funds from the force majeure fund to compensate for the consequences
A solar flare with disastrous consequences for communications
Risk type (external / internal): external Risk owner: project team Consequences of a hazardous event (I): 5 The probability of a HE (L): 0,001| Risk assessment (I × L): 0,005
Proposed risk treatment arrangements:
creation and implementation of a policy of daily backup of key project information and preservation of hard copies
refusal to further implement the project, delivering information to users about the decision as far as possible
Natural disaster, catastrophe of a planetary scale
Risk type (external / internal): external Risk owner: project team Consequences of a hazardous event (I): 5 The probability of a HE (L): 0,001 Risk assessment (I × L): 0,005
Proposed risk treatment arrangements:
creation and implementation of a policy of daily backup of key project information and preservation of hard copies
refusal to further implement the project, delivering information to users about the decision as far as possible
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