Market Adoption

Analyzes market capitalization relative to leading peers in the same category, serving as a proxy for market confidence and the issuer's incentive to address material deficiencies.

Scoring divides the protocol's market cap by the category median, with assets grouped into peer categories: Stable–Base, Stable–Alt, LST, LRT, and Wrapped. The asymmetric range reflects market cap's nature as a noisy proxy: it can confirm absence of obvious risk but cannot substitute for direct evaluation of reserve quality, governance, or legal structure.

Tier	Market Size vs. Peers (% of median)	Reasoning	Evidence
Category leader	25% to 100%+	Convergence of liquidity depth (thicker secondary markets, tighter spreads, larger natural arbitrageur base), continuous regulatory and analyst scrutiny that forces institutional-grade standards, and revealed preference of due-diligence-driven counterparties, all structurally risk-reducing.	Top-quintile protocols within each category historically show lower rates of critical security incidents per dollar deployed than the bottom quartile (Halborn 2023, CertiK 2024). USDC absorbed approximately $3B in net redemptions over 72 hours following the SVB collapse without structural failure.
Established baseline	10% to 25%	Sufficient scale to demonstrate operational viability, attract institutional integrations, and maintain meaningful liquidity depth under normal conditions.	Examples: LUSD, FRAX, PYUSD in stablecoin categories; rETH, swETH in LSTs.
Transitional	5% to 10%	Real, functional protocol with material market presence, but adoption level has not been tested against a category-wide stress event.	Examples: newer LRT protocols, recently-launched RWA wrappers in the 12–18 months following launch.
Fragility zone	Sub-5% of category median	Convergence of three risk factors at small relative scale: liquidity fragility (thin secondary markets amplify exits into runs), operational resource constraints (limited budget for audits, incident response, controls), and counterparty concentration.	Iron Finance held $2B at peak but its collateral base was structurally thin. Small relative scale within a category produces thin secondary-market depth and weak arbitrage support, amplifying losses under redemption pressure. Mai Finance and various pre-2022 algorithmic stablecoins demonstrated this dynamic.