#DeFiGetsGraded «Defi receives a rating» translates as «Defi receives a score» or «Defi has a score». This refers to the process of assessing the risks and reliability of decentralized finance (DeFi) projects.

Since the DeFi ecosystem is very dynamic and constantly evolving, there is no central authority that controls or regulates these projects. Therefore, rating frameworks have been developed to help users and investors understand the associated risks before investing their capital.

What factors are assessed in the DeFi rating?

Several key aspects are analyzed to determine the project's rating:

* Smart contract risk: Smart contracts are checked for potential vulnerabilities, flaws, or coding errors that could be exploited by hackers. Security audits conducted by specialized firms are extremely important at this stage.

* Financial risk: The financial stability of the protocol is assessed. This includes the liquidity of assets, collateral risk (whether the collateral assets are sufficient), and market volatility.

* Centralization and governance: It is analyzed whether the project is truly decentralized.