Evidence-Backed Risk Methodology v0.3
Purpose
v0.3 replaces hand-entered dimension scores with deterministic factor scoring tied to evidence.
The score is a comparative heuristic, not a probability of loss, credit rating, guarantee, or personalized investment recommendation.
Dimensions and weights
| Dimension |
Weight |
| Protocol |
20% |
| Asset |
15% |
| Liquidity |
20% |
| Oracle |
15% |
| Stablecoin |
15% |
| Chain |
15% |
Scoring principle
Each dimension contains explicit factors. A factor must have:
- a deterministic rule;
- one or more evidence references;
- an evidence freshness state;
- a confidence value;
- a plain-language explanation.
A missing or expired critical factor makes the dimension UNKNOWN and blocks commercial release.
Factor rules
Protocol
- Operational state — 35%: 0 if the reserve is enterable and neither frozen nor paused; otherwise 100.
- Security controls — 35%: 10 when both published external audits and a continuous bug bounty are evidenced; 40 when only one is evidenced; 80 otherwise.
- Governance risk controls — 30%: 15 when dynamic reserve parameters and governance voting are evidenced; 50 when partially evidenced; 80 otherwise.
Asset
- Collateral LTV — 30%: <=65 → 10; <=75 → 25; <=80 → 40; <=85 → 60; >85 → 85.
- Supply-cap headroom — 35%: >=30% → 10; >=20% → 25; >=10% → 40; >=5% → 70; <5% → 90; cap reached → 100.
- Borrow-cap headroom — 35%: same thresholds as supply-cap headroom.
Liquidity
- Utilization vs optimal — 50%: <=80% → 10; <=90% → 25; <= optimal → 45; <= optimal+2pp → 65; <=98% → 80; >98% → 95.
- Absolute available liquidity — 30%: >=$500M → 10; >=$100M → 20; >=$50M → 35; >=$10M → 55; >=$1M → 75; <$1M → 90.
- Available-liquidity ratio — 20%: >=30% → 10; >=20% → 20; >=10% → 40; >=5% → 65; >=2% → 80; <2% → 95.
Oracle
- Price source — 50%: Chainlink → 10; CAPO → 20; other explicitly identified source → 40; unknown → UNKNOWN.
- USD peg deviation — 30%: <=0.10% → 5; <=0.50% → 20; <=1% → 50; <=3% → 80; >3% → 100.
- Oracle configuration — 20%: identified oracle address → 10; missing address → UNKNOWN.
Stablecoin
- Reserve coverage — 35%: >=100% → 5; >=99.5% → 40; <99.5% → 100.
- Reserve liquidity — 25%: highly liquid cash/cash-equivalent composition evidenced → 10; otherwise 60.
- Transparency / assurance — 20%: weekly disclosure plus monthly third-party assurance → 10; one only → 35; neither → 80.
- Issuer control surface — 20%: upgrade + pause + blacklist capabilities → 60; two → 45; one → 30; none → 15.
Administrative controls are treated as a centralization/legal-control risk vector even when they can also mitigate operational incidents.
Chain
- Economic finality security — 60%: >=33% slash threshold for finalized-state reversal → 10; >=20% → 25; lower/unknown → 60.
- Finality latency — 20%: <=1 min → 5; <=5 min → 10; <=15 min → 25; >15 min → 50.
- Settlement layer — 20%: L1 → 5; L2 → 30; bridge-dependent/appchain → 50; unknown → 70.
Bands
- 0–19: LOW
- 20–39: MODERATE
- 40–59: ELEVATED
- 60–79: HIGH
- 80–100: CRITICAL
Bands are descriptive labels only.
Confidence
Evidence records carry confidence between 0 and 1. Dimension confidence is the weighted average of its factor confidence. Overall confidence is the dimension-weighted average.
Commercial beta release requires:
- verified market-data release gate = PASS;
- all risk dimensions = PASS;
- overall confidence >= 0.85;
- no critical evidence item expired or UNKNOWN;
- report clearly labeled as beta methodology.
A passing commercial beta gate means the report is sufficiently evidenced for a low-cost informational beta product. It does not mean the methodology is statistically calibrated to predict losses.