Anchor PD
The Anchor PD establishes the base probability of default for a rated product before modifiers are applied. It is assessed across four dimensions — asset quality, audit quality, contract maturity, and custody risk — each combined into the anchor assessment.
Asset Quality
Assesses the creditworthiness and stability of the reserves, underlying assets, or strategies supporting a asset's value. The methodology captures three risk dimensions: market risk, credit risk, and liquidity risk.
Audit Quality
Analyzes the frequency and scope of completed smart contract audits, the credibility of the auditors, and the size and structure of any bug bounty programs. Contract complexity influences the weight of the metric.
Contract Maturity
Assesses the duration and performance history of deployed smart contracts as an indicator of exploit risk and protocol stability.
Custody Risk
Evaluates the reliability of the structures safeguarding underlying assets, covering both the financial and operational risks of centralized custodians and the exploit probability of smart contract custody mechanisms.