Building a dependency map
A four-step procedure whose most important output is the list of what could not be established.
This lesson has had no expert review. It was written for this platform and against the evidence it cites; nobody has gone through it independently.
Learning objectives
- You can build a dependency-based listing for a portfolio.
- You can report the limit of your own survey as a row of its own.
Check your prior knowledge
Answer these for yourself before reading on. Wherever you hesitate is where this lesson pays off.
- Which components do several positions typically share?
- Where do you find which collateral a lending market accepts?
- How deep does a chain have to be followed?
Core concept
Four levels, always the same
Chain, bridge, stablecoin, oracle. These four recur across every segment and are the levels at which a single failure hits several positions at once. A map surveying them covers most of the dependency exposure — not all of it, but the part that recurs systematically.
Two levels deep is almost always enough
The first level is the protocol the capital sits in; the second is the components it uses itself. Going deeper yields rapidly diminishing returns, because the third level usually contains the same four categories again. Completeness at the second level across all positions matters more than depth.
The “not established” row is the result
A map without that row claims a completeness no survey can deliver. With it, it becomes a defensible statement: “these four dependencies are surveyed; for two positions the oracle attribution could not be established”. That is less satisfying and considerably more usable — because a reader knows where to ask.
Definitions
- Dependency map
- A listing of positions by shared components rather than by protocol.
- Second level
- The components the protocol held uses itself.
Model
List positions, with value
Per position, survey the four levels: chain, bridge, stablecoin, oracle
Sum by dependency rather than by protocol
Not established as its own row, with value and position count
Formulas
Concentration per level
Share = Σ position value with this dependency / portfolio value- dependency
- a specific chain, bridge, stablecoin or oracle provider
Limit: Positions with unestablished attribution are missing from the numerator and appear to lower the share. They therefore need to be reported separately, not silently treated as “without this dependency”.
Worked example
A map with an honest gap
- Positions
- 8, USD 12m in total
- Stablecoin X
- 5 positions, USD 7.4m (62 %)
- Oracle provider Y
- 4 positions, USD 5.1m (43 %)
- Not established
- 2 positions, USD 1.8m (15 %)
The oracle share is at least 43 % and at most 58 %, depending on how the two unestablished positions would be attributed.
A range instead of a number — and the range is the real information.
Reading: Without that row it would read “43 %”, and nobody would know the value can reach 58 %. The range also says how much work closing it would take: two positions.
Retrieval
Exercise on real data
Pick three markets and survey the four levels for each, as far as the data allows. Explicitly record what you could not establish.
Survey three markets' dependency chains →Compare your map with the case study: how many independent risks remain there after the same survey?
Case study as a cross-check →Application
Your map gives a 62 % stablecoin share with 15 % of positions unestablished. How do you report it?
Related case studies
Institutional reading
- Bank
- Is the dependency map refreshed at the same frequency as the position listing?
- Insurance
- Does the map also cover the dependencies of risks written, not only of its own investments?
- Asset management
- Does any surveyed level sit above the internal concentration limit?
Metrics in this lesson
Key takeaways
- Chain, bridge, stablecoin, oracle — four levels that recur systematically.
- Completeness at two levels is worth more than depth on individual positions.
- Without the “not established” row, every gap works in the reassuring direction.
Evidence
- EVD-2026-0001
Electronic Markets (Springer) — A multivocal literature review of decentralized finance: Current knowledge and future research avenues