Index safety score explained
Index safety score
While the strategy allocation score is used to calculate strategy allocation within the index, the overall index score is a summarized assessment of anti-risks with more generalized criteria, mostly adapted from Yearn. The score is a simplified safety rating designed to provide users with an estimation of the risk of a particular index.
Simplicity
The index is evaluated in terms of the complexity of the internal processes within the index. Does the index utilize a few simple strategies like staking or does it have complex mechanics such as leverage, risk of liquidation, and involvement with multiple protocols?
In case of urgency, indexes with simple strategies are easier and faster to withdraw, which increases the chances of saving funds.
Longevity
Each strategy within the index is evaluated by the lifetime parameter. This estimates the time that the strategies have been operational with no critical issues and changes in the code base. The total average score of the index is determined from all strategy scores.
Protocols Safety
Protocols Safety evaluates the resilience of the protocols the index uses. It considers the safety measures given the current DeFi security standards, based on our internal assessments and due diligence compared to the top projects in DeFI. This includes multi-sig health, decentralization, bounty programs, audits, etc.:
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