To admit new strategies and protocols into the Rari Capital pools, such as the stable pool and yield pool, each strategy must be evaluated for risk. This evaluation occurs to help determine which pool a specific strategy belongs in and if the strategy is suitable for the protocol. To conduct this analysis, we have created a strategy assessment framework to compare strategy risks at a glance, while offering a structure to facilitate thorough appraisal.
First, there are brackets for strategies to be sorted into. Currently, a strategy can fall into the lending, yield farming, or automated market maker categories. It is worth noting that as DeFi evolves, this framework will adapt and establish new categories for newly innovated strategies. Furthermore, within each category, there is a specific risk framework catered to each strategy style, which is combined to synthesize an overall strategy score.
Strategy risk scores can then be presented to the community in governance proposals to add new strategies to the Rari Protocol.
We will be publishing a public form for community members to conduct their own checks on strategies in the future. Shown below is a brief outline of the covered areas, inspired by DeFi Score's metrics.
This is the risk assessment framework for lending strategies. Each section has a designated score allocation and the overall score is calculated from their distributions.