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Transparency in Decentralized Finance

DeFi Score is a single, consistently comparable value for measuring protocol risk, based on factors including smart contract risk, collateralization, and liquidity.

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Open Source and Community Managed

We encourage the Ethereum community to evolve the methodology, making it more effective and easier to use. Have your say in the future of DeFi risk.


What goes into a platform’s DeFi Score?

 
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Smart Contract Security

Errors, bugs and unexpected outcomes in smart contracts can cause real financial harm. These risks can be minimized by proactive code audits and formal verification from reputable security firms. The DeFi Score model accounts for the coverage and veracity of security audits across a protocol’s set of smart contracts.

 
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Smart Contract Openness

Protocol and code transparency are critical steps towards establishing trust in a decentralized world. Smart contract code openness signals confidence by inviting others to verify and not simply trust. In contrast, obfuscated code and protocols can offer weak security and delay the identification of critical bugs. The DeFi Score model accounts for verified open code.

 
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Financial Risk

Today’s DeFi platforms rely on over-collateralization to address liquidity and credit risk - the risks that a lender will not be able to exit a position or be paid back in full. Price volatility is generally understood, however, the types and makeup of the collateral supporting a protocol are equally critical and often overlooked. The DeFi Score factors in average liquidity and the makeup of all collateralized assets.

 

Get Involved

Join the DeFi Score community! We are actively seeking contributions from people experienced in data science, risk management, and smart contract security.