Reader objective
Build a repeatable pre-approval and monitoring process.
1. Define the position
- Name the exact token, contract, chain, protocol, market, and strategy.
- State the economic exposure and source of expected return.
- Identify the legal claim, issuer, counterparty, or lack of one.
- Record eligible investor and jurisdiction restrictions.
2. List every party that can change the position
- Asset issuer, collateral, redemption, and freeze authority
- Protocol contracts, upgrades, pauses, governance, and audits
- Oracles, bridges, curators, keepers, relayers, and front ends
- Chain liveness, transaction ordering, validators, and upgrade control
- Wallet, custodian, signer, recovery, and transaction-approval workflow
3. Test loss and exit
- Historical exploits, bad debt, depegs, halts, and governance failures
- Observable liquidity at client size, not only TVL
- Redemption gates, queues, market depth, fees, and settlement delay
- Failure scenarios for oracle, bridge, collateral, issuer, and keys
- Expected recovery path and responsible party
4. Make the decision monitorable
- Separate research assessment and firm-shelf reasons
- Client-specific position constraint and advisor-selected amount
- Observable review conditions set for the relevant research or decision layer
- Named owner, next review date, and evidence archive
- Client-language risk statement and suitability rationale
- Version history for corrections and changed decisions
Evidence standardIf a fact can revoke the recommendation, record its source and monitoring method when the position is approved.
What each step has decided
Each step above supports a distinct published research finding.
- Defining the position decided USD.AI: write down what the instrument actually is and the synthetic dollar becomes non-recourse lending against depreciating GPU hardware with a 30-day exit queue. Rejected.
- Listing every party that can change the position decided Kelp's rsETH: the staking logic was fine, and the cross-chain bridge was the real security model. In April 2026 a forged bridge message minted about 116,500 unbacked tokens, roughly 18% of supply. Rejected.
- Testing loss and exit decided Convex: converting CRV to cvxCRV is one-way, with no redemption path back. The only exit is a market sale at whatever discount prevails, which is worst exactly when everyone wants out. Rejected.
- Making the decision monitorable is why every Ketju memo, including every adverse assessment, ships with the observable events that would reopen the file and a scheduled next review.
Primary and reference sources
- Investment Management — Investment Advisers · U.S. Securities and Exchange Commission
- Crypto Assets · FINRA