In traditional finance, the balance sheet is like a health report for a company—assets, liabilities, and equity are all clearly visible. But in DeFi? Most on-chain vaults and yield aggregators simply can't produce such reports; either they don't have them or they are black boxes that make people head-scratching.

This pain point is gradually being addressed. Through decentralized oracle networks, every on-chain asset management protocol can now build a dynamic, real-time, verifiable transparent balance sheet. It may sound small, but it changes the way the entire market assesses risk and value.

**From Rough Estimates to Precise Numbers**

Currently, evaluating the risk of a DeFi vault? Most of the time, it's based on rough estimates combined with limited public data. To truly see clearly, three dimensions need to be fully transparent:

Asset side—Real-time extraction of all asset categories, quantities, market values, and distributions held by the protocol. Main chain assets are included, cross-chain assets are included, and derivative positions are also counted. Liability side—Clear debt structure, outstanding loans, leverage multiples, and distance to liquidation lines—all these risk indicators should be laid out in front of you. Equity changes—Every profit distribution, fee extraction, and capital movement is verified and recorded by the network to ensure authenticity.

This standardized output of the "balance sheet" can be directly used by investors, audited by institutions, and referenced by rating agencies. The analysis threshold is lowered significantly.

From ledger record units to value measurement tools, this on-chain accounting system is being perfected and is also changing the way we view DeFi risks.