Decentralized finance (DeFi) analytics platform DeFi Pulse has launched new safety ratings in alpha to enable users to compare the risks of on-chain protocols. However, the ratings system is still in development and does not factor in all risks, such as smart contract risks.
In partnership with digital asset modeling platform Gauntlet, the grading tool looks at key factors including user behaviour, collateral volatility, relative collateral liquidity, protocol parameters, and smart contract risk. Each project is then given a risk profile ranking them between 1-100.
DeFi Pulse and Gauntlet’s new project ranking scores. Source: Gauntlet
Decentralized lending protocols Aave and Compound are the first projects to be reviewed in the new Economic Safety Grade scheme, receiving scores of 95% and 91% respectively. MakerDAO is the next protocol scheduled to receive assessment.
DeFi Pulse stated, “In this initial alpha, these grades are formed by analyzing the historical liquidity and volatility data to find the collateral most likely to cause