DeFi Pulse, a decentralized financial analysis platform (DeFi), has launched new security assessments on Alpha to enable users to compare protocol risk across the chain. However, the ranking system is still under development and does not take into account all risks, such as the risk of smart contracts.

In collaboration with the digital real estate modeling platform Gauntlet, the classification tool explores important factors, including user behavior, security fluctuations, relative security liquidity, protocol parameters and the risk of smart contracts. Each project is then assigned a risk profile with a rating from 1 to 100.

Aave and Compound Decentralized Lending Protocols are the first two projects to be considered by the new financial security board, with grades of 95% and 91% respectively. MakerDAO is the next protocol to be considered.

DeFi Pulse stated: “In this first release, these estimates are generated by analyzing historical liquidity and volatility data to find collateral that is most likely to cause problems.” The team added that the results must be normalized before they are awarded the title:

“The systemic risk to users who borrow stable currencies is assessed and normalized against this security to determine the 1 to 100 points you see on DeFi Pulse.”

Gauntlet pointed out that the assessment tool is not designed to model the risk of smart contracts, and emphasizes that “auditors and formal assessment tools are best suited to assess this type of risk.”

Gauntlet explained that his security rating scale is still in its infancy, and stresses that there are several potential risks associated with lending protocols that are not currently included in his rating system:

An intelligent observer may notice that we omit the case where the protocol is not flexible. We hope to develop this along with some other things as we get closer to the beta. ”

Gauntlet is currently trying to “determine the likelihood of bankruptcy in the entire chain of lending protocols that have been confirmed.”

Earlier this year, due to extreme price volatility, DeFi Platform Maker suffered a massive liquidation when $ 8.32 million disappeared in what was later called “Black Thursday”. Gauntlet hopes that the tool will help prevent future crises in the crypto sector such as Black Thursday.

The growing popularity of DeFi has led to a corresponding increase in prices. This has led to an increase in fake tokens and hoaxes. Last week, the DeFi project to Yfdexf.Finance liquidity mining pool completed the initial fraud, securing $ 20 million in blocked funds earlier this month. Uniswap rival SushiSwap has caused uproar after the sudden departure of protocol founder Chef Noomi. A new security assessment tool will not necessarily solve all these problems, but it is a good start.

Source: CoinTelegraph