Risk Scoring

Protocol Risk

This score measures the security risk associated with the upstream protocol(s) the strategy interacts with based on the measures the protocol has taken to test and ensure the security of their contracts thoroughly. Inputs include the credibility of auditors, Lindy factor, and bug bounty programs, among other considerations.

ScoreCriteria

1

The protocol is less than one year old. No audit by a trusted firm or security researcher.

2

The protocol is less than one year old. Has been fully or partially audited by a security firm or researcher and taken additional steps to ensure security (i.e. bug bounty, Sherlock)

3

The protocol is less than one year old. Has been fully audited by a trusted security firm or researcher or taken additional steps to ensure security (i.e., bug bounty, Sherlock)

4

The protocol is more than one year old. Has been fully or partially audited by a security firm or researcher, or taken additional steps to ensure security (i.e., bug bounty, Sherlock)

5

The protocol is more than one year old. Has been fully audited by a trusted security firm or researcher and taken additional steps to ensure security (i.e., bug bounty, Sherlock)

Complexity

The complexity score is determined by both the complexity for a trader/borrower to execute the strategy successfully and the amount of intervention necessary to avoid experiencing loss. It takes into the intricacies of understanding the strategy, historical backtesting, and the likelihood of liquidation.

ScoreCriteria

1

The Strategy is easy to understand and execute, requiring minimal borrower intervention.

2

The strategy is easy to understand and execute. It requires occasional borrower intervention to prevent loan loss.

3

The strategy is fairly complex and requires frequent borrower intervention to prevent loan loss.

4

The strategy is complex and requires frequent intervention to prevent liquidation.

5

Strategy is highly complex, with a high likelihood for liquidation without continual borrower oversight and intervention.

Longevity

This score measures the length of time a strategy has been active on GoldLink without incident.

ScoreCriteria

1

Less than 1 month

2

Greater than 1 month

3

Greater than 3 months

4

Greater than 6 months

5

Greater than 1 year

Liquidity Risk

Liquidity risk looks at the utilization and diversity of the lending pool. High utilization will result in higher borrower/lender APR and may also prevent lenders from fully withdrawing capital from the pool until active borrow positions are closed and capital is returned to the pool. As the

ScoreCriteria

1

Greater than 95% utilization or <3 wallets hold +90% of TVL

2

Less than 95% utilization or <5 wallets hold +90% of TVL

3

Less than 90% utilization or <10 wallets hold +90% of TVL

4

Less than 75% utilization, <10 wallets hold +75% of TVL

5

Less than 50% utilization, <10 wallets hold +50% of TVL

TVL Risk

The TVL looks at the total amount of loaned capital actively engaged in the strategy. Lower TVL strategies have a higher chance of being fully recompensed in the case of loans loss or exploits.

ScoreTVL Impact

1

Greater than USD 5M

2

Less than USD 5M

3

Less than USD 2.5M

4

Less than USD 1M

5

Less than USD 500K

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