Announcing the Prime Rating Beta
A permissionless framework for quantifying risk and quality of Open Finance protocols.
The Prime Rating squad is pleased to announce the Public Beta of Prime Rating, a permissionless and comprehensive framework for quantifying the quality and risk of Open Finance protocols.
The Decentralized Finance industry has seen exceptional growth in 2020, growing from a mere $1B to over $20B of total value locked in DeFi applications currently. The potential of a permissionless and composable financial system is becoming increasingly clear, but this fast growth trajectory also comes at a cost: high knowledge asymmetry, increasing complexity, and coordination friction. It has become almost impossible to track all developments and understand the associated risks (and qualities) of the various DeFi protocols. To help users, builders and investors better understand the quality and risk of each protocol, we decided to create Prime Rating!
Prime Rating offers a simple and comparable opinion in the form of a letter rating on a scale from A+ to D that represents the overall quality of an Open Finance protocol from a neutral view, based on publicly available data.
The Prime Rating system operates through a permissionless process governed by the Prime Rating DAO. Prime Rating is built to improve the resilience and functionality of the Open Finance ecosystem, to educate end-users about the functionalities and associated risks, and to create a benchmark for an Open Financial system that is permissionless, trustless, and transparent while respecting user sovereignty. Version 1 of the Prime Rating product evaluates protocols from the perspective of a protocol token holder based on smart contract quality, data quality, and fundamental quality.
Prime Rating Scale
The protocols are rated on a scale from A+ to D depending on the aggregated outcome of the smart contract, data, and fundamental review. The full scorecards can be found in the Prime Rating Database.
To provide a neutral and all-encompassing opinion on Open Finance protocols, Prime Rating has developed a permissionless and modular framework that utilizes DAO best practices and decentralized data storage to operate as independently from any centralized entity as technologically possible. By being permissionless, Prime Rating is more resilient, neutral, and able to leverage the wisdom of the crowd. All Prime Ratings and documents are publicly available and can be accessed non-exclusively by anyone with an internet connection, making Prime Rating a public good for the benefit of the systemic advancement of Open Finance.
Become a Rater and earn Rewards!
Prime Raters are rewarded for submitting reports that are accepted by the Governance mechanisms and added to Prime Rating. Currently, Prime Rating DAO rewards each rater with 125 xDAI + 10 Prime Rating Tokens (PRT) and 10 REP for each unique report that covers a project/category that has not been rated yet. Of course, rewards are only allocated if the Report is accepted.
The short-term objectives of Prime Rating are to 1. Create a sound and efficient process for permissionless rating, and to 2. Create verified and high-quality reports on the top 20 DeFi Protocols. To achieve this, we need more Raters to join, rate, discuss, and build with us!
Aspiring Raters are invited to join the Prime Rating Discord.
For support, remarks, and contributions please reach out to the Stewards in the Prime Rating Discord.