Project Methodology

How the Project Probability of Loss (PoL) Score Works

PoL is a structured risk assessment framework designed to estimate the likelihood that users, token holders, or a counterparty of a crypto project may experience a financially material loss, excluding losses caused solely by market price fluctuations.

How the Score is Calculated

PoL Score is calculated in 3 steps, ensuring ...

1

Metric Set

2

Calculation Score

3

Score Conversion

This stage focuses on defining the set of metrics applicable to a specific project. These metrics will be collected and assessed primarily through our automated systems, with certain cases requiring manual evaluation. Additionally, some data may not be publicly available and will need to be submitted directly by the project.

Metric SetDefault MetricsProject-Specific MetricsCategory-Specific Modifiers

Metric
Sub-metric
Condition
Sub-score

Audit Coverage

Audit relevance, findings status, and coverage percentage relative to the project's overall structure are assessed.

Medium, High and Critical findings checkCode comparison (deployed vs audited)
Metric Weight
16%
Sub-metric
Condition
Sub-score

Reviewed scope

91-100%

10

81- 90%

9

71-80%

8

61-70%

7

51-60%

6

41-50%

5

31-40%

4

21-30%

3

20% and under

2

Bug Bounty

Bug bounty program effectiveness, including provider quality, payout policy, and team response rates, is evaluated.

Metric Weight
12%
Custody5%
Pay-out policy5%
Attestation letter2%
Proof of Funds0%
Sub-metric
Condition
Sub-score

Custody

Third party hosted

10

Self hosted

5

Disclosure policy only

2

Pay-out policy

250k USD +

10

100k-250k USD range

8

50k - 100k USD range

5

10k-50k USD range

3

Under 10k USD

1

Attestation letter*

Team response rate within 1 day

10

Team response rate within 3 days

5

Team response rate within 1 week

2

Team response rate takes more than a week

0

Proof of Funds

Present

10

Absent

0

Third party monitoring

Presence of third-party on-chain contract monitoring and proper setup completion are verified.

Metric Weight
5%
Monitoring2%
Third party monitoring attestation letter2%
Sub-metric
Condition
Sub-score

Monitoring

Enabled

10

Disabled

0

Third party monitoring attestation letter

Project setup properly

10

Improper setup

0

Prevention

Presence of prevention mechanisms such as pausability and emergency controls is evaluated.

Metric Weight
2%
Sub-metric
Condition
Sub-score

Prevention

Third party set up

10

No third party set up

0

Metric
Sub-metric
Condition
Sub-score

Revenue sources

Reported revenue streams and dependency on each source.

Sub-metric
Condition
Sub-score

Sources list

Transaction/Protocol Fees

i/e

Marketplace Commission

i/e

Staking-as-a-Service

i/e

Premium Services / SaaS

i/e

Licensing Infrastructure/Tech

i/e

Enterprise Partnerships

i/e

Yield from Treasury Management

i/e

Token Launchpads / IDOs

i/e

Advertising / Sponsored Content

i/e

Consulting/Advisory

i/e

Validator Rewards (native)

i/e

Token pump

i/e

Source dependency

One source with consistent cash flow

One source without consistent cash flow

Multiple sources with consistent cash flow

Multiple sources without consistent cash flow

Inflation

Periodic inflation percentage of the project token is monitored.

Metric Weight
5%
Sub-metric
Condition
Sub-score

Inflation band

0-5% a year

10

5-10% a year

7

10-15% a year

5

15-20% a year

3

25% a year

0

TVL

Total Value Locked trends are tracked and suspicious spikes are identified.

Metric Weight
1%
Trend0.8%
Suspicious Spikes0.2%
Sub-metric
Condition
Sub-score

Trend

Uptrend

10

Range

5

Downtrend

0

Suspicious spikes

There are

0

There are no

10

Active addresses

The number of unique wallets that meaningfully interact with a project's token

Sub-metric
Condition
Sub-score

Evaluated from available on-chain activity and project disclosures (see detailed methodology).

i/e

Treasury quality

Asset composition in treasury wallets, including ratio of top-tier assets, native tokens, and project tokens, is assessed.

Metric Weight
2%
Sub-metric
Condition
Sub-score

Treasury structure

Top tier assets structure

10

Treasury >50% native token

5

Native token only

3

Circulating supply analysis

Alignment of reported circulating supply with reference data.

Metric Weight
5%
Sub-metric
Condition
Sub-score

Comparison

The same

10

Up to 5% difference

0

Different

-5

Lockers analysis

Presence and quality of token locking mechanisms are evaluated.

Metric Weight
2%
Sub-metric
Condition
Sub-score

Locker type

Third-Party Audited Lockers

10

Self-Hosted Timelock Contracts

7

Multi-Signature Vaults + Delay Module

5

Vesting & Yield Vault Contracts

3

Burn Address Forever Lock

2

Off-Chain Promises

0

Metric
Sub-metric
Condition
Sub-score

Washtrading

Presence of wash trading activity across centralized exchanges is detected.

Sub-metric
Condition
Sub-score

Level

Above average

-5

Average

0

Below average

0

GitHub activity

Recent development activity (where repositories are in scope).

Metric Weight
1%
Last week activity1%
Sub-metric
Condition
Sub-score

Last week activity

There was

10

There was no

0

Founders with track record

Founders' relevant education, work experience, and business background are verified.

Metric Weight
1%
Education0.33%
Working experience0.34%
Business experience0.33%
Sub-metric
Condition
Sub-score

Education

Relevant

1

Irrelevant

0

Working experience

Relevant

1

Irrelevant

0

Business experience

Relevant

1

Irrelevant

0

Proper Documentation in place

Presence and quality of essential project documentation are assessed.

Metric Weight
2%
White paper0.4%
Tokenomics0.4%
Contracts disclosure0.4%
Verified contracts0.4%
Roadmap0.2%
Roadmap reporting0.2%
Sub-metric
Condition
Sub-score

Document

White paper

0.4

Tokenomics

0.4

Contracts disclosure

0.4

Verified contracts

0.4

Roadmap

0.2

Roadmap reporting

0.2

Certifications

Presence of security certifications such as ISO 27001 (information security management) and CCSS (cryptocurrency security standards) are checked.

Metric Weight
10%
ISO 270015%
CCSS5%
Sub-metric
Condition
Sub-score

ISO 27001

Yes

10

No

0

CCSS

Level 1

5

Level 2

7

Level 3

10

No

0

Liquidity risks

DEX/CEX liquidity depth relative to market cap and exchange quality are analyzed.

Metric Weight
6%
DEX LP to mcap1%
CEX volume to mcap1%
CEX total orderbook to mcap1%
Quality of CEXs2%
DEXs LP state1%
Sub-metric
Condition
Sub-score

DEX LP to mcap

Above average

10

Average

5

Below average

0

CEX volume to mcap

Above average

10

Average

5

Below average

0

CEX total orderbook to mcap

Above average

10

Average

5

Below average

0

Quality of CEXs

9-10 CG Trust score

10

7-8 CG Trust score

8

5-7 CG Trust score

5

5 and below by CG Trust score

0

DEXs LP state

Locked

2

Unlocked

0

Metric
Sub-metric
Condition
Sub-score

Past incidents reaction

Project response and remediation approach to past security incidents are evaluated.

Metric Weight
1%
Media reaction0%
The root cause fixed1%
Sub-metric
Condition
Sub-score

Media reaction

Alert

i/e

Week

i/e

Passive

i/e

Strong

i/e

The root cause fixed

Yes

10

No

0

Audit Firm Reputation

Quality and credibility of auditing firms engaged by the project are assessed.

Metric Weight
3%
Sub-metric
Condition
Sub-score

Firm tier

Top tier security companies

10

Mid tier security companies

7

Low tier security companies

3

No tier security companies

0

Social Fraud

Twitter, website, and trends signals are assessed for authenticity and engagement quality.

Metric Weight
2%
Twitter Score0.5%
Twitter bots ratio0%
Twitter interactions0.5%
Website visits0.5%
Trends check0.5%
Sub-metric
Condition
Sub-score

Twitter Score

Bad

0

Good

5

Excellent

10

Twitter bots ratio

Organic followers only

i/e

Some portion are the bots

i/e

The majority are bots

i/e

Bots only

i/e

Newly created page

i/e

Twitter interactions

Above the coefficient

i/e

Under the coefficient

i/e

Website visits

Higher than the average range

i/e

In the average range

i/e

Below the average range

i/e

Trends check

Higher than the average range

i/e

In the average range

i/e

Below the average range

i/e

Insurance

Insurance coverage, including type, provider, and scope of protection, is assessed.

Metric Weight
2%
Custody1%
Coverage1%
Sub-metric
Condition
Sub-score

Custody

Third party hosted

10

Self hosted

5

Coverage

Complete

10

Average

7

Project Longevity

Project age and track record in the Web3 ecosystem are evaluated.

Metric Weight
1%
Sub-metric
Condition
Sub-score

Age

5 years +

10

3 years +

7

1-3 years

5

Newly created protocol

0

Protocol Longevity

Project age and track record in the Web3 ecosystem are evaluated.

Metric Weight
1%
Sub-metric
Condition
Sub-score

Age

5 years +

10

3 years +

7

1-3 years

5

Newly created protocol

0

Penalties

Presence of these metrics will decrease score

MM red flag Identification

The list of suspicious representatives

from 0 to -10

Investor red flag Identification

The list of suspicious representatives

from 0 to -10

Metric
Sub-metric
Condition
Sub-score

Disclaimers

Presence of a dedicated disclaimers page is verified.

Legal section, terms and policies
Metric Weight
0.5%
Sub-metric
Condition
Sub-score

Presence

Present

10

Absent

0

Public registration

The project's legal registration location is documented.

Project has to be registered
Metric Weight
0.5%
Sub-metric
Condition
Sub-score

Presence

Present

10

Absent

0

Public team

Whether core team members are publicly identified is assessed.

Metric Weight
0.5%
Sub-metric
Condition
Sub-score

Visibility

Public

10

Anonymous

0

Regulatory Surface Controls

Presence of compliance features such as KYC/KYT is evaluated.

KYC/KYT where relevant
Metric Weight
0.5%
Sub-metric
Condition
Sub-score

Jurisdiction

Quality and regulatory environment of the registration jurisdiction are assessed.

Jurisdiction QualityCrypto jurisdictions tier list
Metric Weight
1%
Sub-metric
Condition
Sub-score

Tier

Tier 1

10

Tier 2

7

Tier 3

4

Tier 4

2

Regulatory compliance

Whether the project operates under applicable regulations is verified.

Metric Weight
2%
Sub-metric
Condition
Sub-score

Mode

Operates under regulation

10

One of the entities operates under regulation

5

Does not operate under any regulation

0

The domain score is adjusted by a corresponding multiplier, determined by a set of predefined criteria and requirements.

Calculation ScoreSecurityFinancialOperationalReputationalRegulatoryDependencythe Scale
Metric
Multiplier
Description
Active addresses
x1.025

Wallets interacting with project / token

GitHub activity
x1.025

Assessed based on the presence of weekly commits

Project longevity
x1.15

If 3 years + 1.07

Protocol longevity
x1.15

If 5 years + 1.15

No major security incident
x1.15

If there was a major incident there is no score at all

Licensed by a recognized regulator
x1.1

If there is no maximal multiplier yet (x1.3) it can give up to 1.1

Category leading project
x1.1

Top 3 representatives of the category by market cap

Score 0–65

1.3×

Full multiplier

Score 65–90

1.3× → 1.0×

Gradually decreases

Score 90+

1.0×

No adjustment

The final calculation score is inverted to represent the Probability of Loss (PoL) score.

PoL ScoreInverse(Calculation Score)
  1. Calculation score 0–25 maps to PoL grade D (PoL range 75–90).
  2. Calculation score 25–30 maps to PoL grade DD (PoL range 70–75).
  3. Calculation score 30–40 maps to PoL grade DDD (PoL range 60–70).
  4. Calculation score 40–45 maps to PoL grade C (PoL range 55–60).
  5. Calculation score 45–50 maps to PoL grade CC (PoL range 50–55).
  6. Calculation score 50–60 maps to PoL grade CCC (PoL range 40–50).
  7. Calculation score 60–65 maps to PoL grade B (PoL range 35–40).
  8. Calculation score 65–70 maps to PoL grade BB (PoL range 30–35).
  9. Calculation score 70–80 maps to PoL grade BBB (PoL range 20–30).
  10. Calculation score 80–85 maps to PoL grade A (PoL range 15–20).
  11. Calculation score 85–90 maps to PoL grade AA (PoL range 10–15).
  12. Calculation score 90–100 maps to PoL grade AAA (PoL range 0–10).

Seals

Seals are awarded independently of the PoL score. They recognize specific, verifiable commitments a project has made

Security Measures

Awarded to projects that have implemented all three major security infrastructure components simultaneously.

  • Audit with 80%+ coverage
  • Third-party bug bounty program
  • Third-party monitoring enabled

Independent Certificates

Awarded when a project holds both internationally recognized security certifications.

  • ISO 27001 (or SOC 2)
  • CCSS Certification

Self-Regulation

Awarded when the project actively participates in the scoring process by submitting data.

  • Submitted >10% of required information voluntarily

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