DeFi Pulse and Gauntlet have released a new rating tool for risk assessment for major DeFi projects.
In a blog post published by Gauntlet COO Jhon Marrow, a risk assessment tool developed by Defi Pulse and Gauntlet was announced. Created in partnership with digital asset modeling platform Gauntlet and decentralized finance (DeFi) analytics platform DeFi Pulse, the tool began to list the risk levels of protocols on the chain for users. Working with user behavior, collateral volatility, relative collateral liquidity, protocol parameters and smart contract risk, the evaluation tool creates a risk rating between 1 and 100 for each project as a result of the evaluation.
Yet in the Early Stages
Stating that the tool called the Economic Security Score Model is at an early stage, Marrow said that they plan to include illiquid protocols in the beta version of the tool, which analyzes past liquidity and volatility data to find the collateral that is most likely to cause problems in the alpha phase.
According to Marrow, the rating system focuses on determining the probability of insolvency in audited in-chain credit protocols.
After Aave and Compound, it’s time for MakerDAO
Compund received 91 points, while Aave got 95 points from the vehicle where DeFi credit protocols Aave and Compund were rated. While the decision is made to review the projects in order to increase the security level, the MakerDAO project is planned to be evaluated in the next study.
Popular DeFi’s Brought Risks With It
Increasing its popularity, DeFi’s brought risks with increasing counterfeit tokens and fraud incidents. Although the turbulent processes in the cryptocurrency markets have continued to talk about a sustainable trust environment for DeFi projects, the interest in DeFi continues to increase. Although the rating tool, which is still at a very early stage, makes evaluations in a narrower scope for now, it may have a more successful structure in the future.