Vault safety score explained

Vault safety score

While the strategy allocation score is used to calculate strategy allocation within the vault, the overall vault 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 vault.

Simplicity

The vault is evaluated in terms of the complexity of the internal processes within the vault. Does the vault 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, vaults with simple strategies are easier and faster to withdraw, which increases the chances of saving funds.

ScoreSimplicity

5

Vault consists of simple strategies and can be exchanged to the notional token by the Locus team easily. These vaults are less likely to incur losses.

4

The strategies inside the vault are relatively simple and easy to withdraw but it might have some low-risk mechanics.

3

Vault has the potential for losses like high withdrawal fees or requires detailed queue management to prevent losses.

2

Vault uses leverage or debt, and is not easy to unwind.

1

Vault is highly complex, uses leverage or debt and is not easy to unwind

Longevity

Each strategy within the vault 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 vault is determined from all strategy scores.

ScoreLiquid treasury / TVL ratio

5

Strategies used have been running for 8+ months

4

Strategies used have been running for 4+ months

3

Strategies used have running for 1-4 months

2

Strategies used have been running for less than one month

1

Strategies used have been live for less than two weeks

Protocols Safety

Protocols Safety evaluates the resilience of the protocols the vault 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.:

ScoreLiquid treasury / TVL ratio

5

Protocols involved are trusted blue chip protocols with a good track record of security. For example Maker, Uniswap, Curve, AAVE, and Compound.

4

DD took place. Protocol contracts are audited/verified by at least two reputable audit firms. A multi-sig with an appropriate threshold is required and/or contracts are immutable. Has a good bounty program.

3

DD took place. Protocol contracts are audited/verified by at least one reputable audit firm. A multi-sig with an appropriate threshold is required and/or contracts are immutable. Has a good bounty program.

2

DD took place. Protocol contracts audited/verified. A multi-sig is required or contracts are upgradeable. Multisig has a low threshold of signers. No bounty program.

1

No due diligence (DD) document for this strategy. The protocol contracts used are very recent and not audited/verified. An EOA (externally owned account) owns the contracts and can upgrade them.

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