#DeFiGetsGraded The term “DeFi gets graded” refers to the emergence of risk assessment systems for DeFi (decentralized finance) protocols — a response to the growing need for transparency, security, and reliability in this rapidly expanding sector.

🧮 What is this “grading” system for DeFi?

The most well-known initiative is the DeFi Pulse Economic Safety Grade, developed in partnership with Gauntlet Networks. It assigns an economic safety grade to DeFi protocols based on:

Risk of insolvency

Stability of collateralized assets

User behavior and liquidity

Financial stress simulations

🔗 Read more about the DeFi Pulse system

🧠 Why is this important?

Benefit Impact

🛡️ Investor protection Helps users understand risks before depositing funds

📊 Transparency Creates comparable standards between different protocols

🧠 Education Facilitates entry for less experienced users into the DeFi world

🏦 Institutional interest Attracts funds and companies that require reliable risk metrics

🧨 Regulatory context

The movement to “grade” DeFi also arises amid increasing regulatory pressures, such as the CANSEE Act in the US, which requires DeFi platforms to comply with anti-money laundering rules and economic sanctions — just like traditional banks and brokerages.

🧭 Other frameworks in development

Galaxy SeC FiT PrO: An institutional model for on-chain risk assessment

Moody’s Analytics: Working on metrics to track compliance and transparency in DeFi protocols

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