Credora Token Rating Framework

Methodologies Token Rating Framework
1

Introduction

The Token Rating Framework enables comprehensive risk assessments for a wide range of tokens, capturing the unique characteristics and risks inherent to their structures. This layered and integrated framework ensures foundational risk evaluations are systematically incorporated into broader assessments, enabling consistent and comprehensive risk analysis.

Key Sections

Below is an overview of the core sections covered in the methodology document:

  1. Token Categories: Outlines the categories of tokens rated under the framework.

    • Derivative Tokens: Includes Wrapped Tokens (WTs), Liquid Staking Tokens (LSTs), and Liquid Restaking Tokens (LRSTs).
    • Stablecoins: Includes Stablecoins backed by fiat, digital assets or alternative assets.

  2. Framework Architecture: The framework features a layered structure to evaluate a diverse set of tokens.

    • Sub-Methodology Layer: Foundational assessments based on token category and custodial solution utilized in the token structure, including Smart Contract Custody, Centralized Custody, and Asset Quality sub-methodologies.
      • Smart Contract Custody Sub-Methodology: Evaluates the risks associated with tokens that utilize smart contract-based custody structures.
      • Centralized Custody Sub-Methodology: Assesses the centralized custodian risk for tokens relying on centralized custodians for custody of reserves collateral management.
      • Asset Quality Sub-Methodology: Assesses the risk of underlying reserve assets such as treasury bills. This sub-methodology is only utilized for stablecoin assessments.
    • Calibration Layer: Adjusts Anchor PD using token-specific modifiers addressing additional risk exposures. The Calibration Layer includes the Derivative Token and Stablecoin methodologies.
    • Primary Layer: Applies universal General Token Modifiers—such as Collateralization, Transparency, Governance, and Dependencies—that are relevant across all token structures to differentiate foundational token risks and provide a comprehensive evaluation.

Access the Full Documentation

You can view the complete Token Rating Framework on GitBook.

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