# Risk Management

Our Risk Framework allows Zharta to offer not only liquidation protection to its Borrowers but also a fair risk-adjusted return to its Lenders.<br>

<table><thead><tr><th width="193.33333333333331">Key Risks</th><th width="168">Risk Module</th><th>Goals / Actions</th></tr></thead><tbody><tr><td><strong>NFT Valuation</strong></td><td>Appraisal Model</td><td>Minimizing the appraisal error against real NFT sales</td></tr><tr><td><strong>Credit / Underwriting</strong></td><td><p><a href="risk-management/protocol-simulator">Protocol Simulator</a> /</p><p><a href="risk-management/stability-controls">Stability Controls</a></p></td><td>Manage Credit Risk through adequate LTV and Maturity, in addition to Debt Limits</td></tr><tr><td><strong>Liquidity</strong></td><td><a href="risk-management/stability-controls">Stability Controls</a></td><td>Maintain balanced operational liquidity for Loans and Withdrawals</td></tr><tr><td><strong>Fraud / Hack</strong></td><td>Other Checks</td><td>Avoid loan origination from NFTs flagged as suspicious by key marketplaces like OpenSea</td></tr><tr><td><p><strong>Market</strong> </p><p><strong>(Systemic risk)</strong></p></td><td><a href="risk-management/risk-monitoring">Risk Monitoring</a></td><td>Monitor key Crypto/NFT market indicators and, if necessary, reduce underwriting risk</td></tr><tr><td><strong>NFT/Collection (Unsystemic risk)</strong></td><td><a href="risk-management/risk-monitoring">Risk Monitoring</a></td><td>Monitor key risks of Supported Collections and, if necessary, reduce exposure and/or remove NFT Collection</td></tr><tr><td><strong>Liquidation</strong></td><td><a href="risk-management/recovery-liquidation">Recovery / Liquidation</a></td><td>Minimize risk of capital loss through rules-based liquidation, balancing speed and execution</td></tr></tbody></table>