Risk Scoring
Every vault in YeldX has a composite risk score from 0 to 10, computed from 5 weighted components. Higher score = safer. The score determines the risk label shown on each vault card.
Risk levels
| Label | Score range | Color |
|---|---|---|
| Low | 7.5 – 10.0 | Green |
| Medium | 5.0 – 7.4 | Yellow |
| High | 0 – 4.9 | Red |
The 5 weighted components
Each component produces a score from 0–10. The final score is a weighted sum:
final = protocol × 0.35 + tvl × 0.25 + stability × 0.15 + asset × 0.15 + sustainability × 0.10
graph TD
Score["Risk Score (0–10)"] --> Protocol["Protocol Safety (35%)"]
Score --> TVL["TVL Size (25%)"]
Score --> Stability["APY Stability (15%)"]
Score --> Asset["Asset Quality (15%)"]
Score --> Sustainability["Yield Sustainability (10%)"]
1. Protocol Safety (35%)
Based on audit quality, exploit history, TVL track record, and governance maturity.
| Tier | Examples | Score |
|---|---|---|
| Formally verified, $1B+ TVL, no exploits | Aave v3 | 9 |
| Strong audits, non-custodial, no exploits | Morpho, Compound v3, Pendle | 8 |
| Audited, growing TVL | EtherFi, Curve | 7 |
| Audited, limited track record | Upshift, Symbiotic | 6 |
| New or unaudited | Unknown protocols | 3–4 |
2. TVL Size (25%)
Larger TVL means more liquidity and broader confidence:
| TVL | Score |
|---|---|
| > $100M | 9–10 |
| $10M – $100M | 7 |
| $1M – $10M | 5 |
| < $1M | 2–3 |
3. APY Stability (15%)
Compares live APY vs. 30-day average to detect unsustainable spikes:
| Condition | Score |
|---|---|
| Live APY ≈ 30d average | 9–10 |
| Moderate deviation (< 2x) | 6–7 |
| High spike (> 3x average) | 2–3 |
4. Asset Quality (15%)
Scores the underlying asset's risk profile — stablecoins score highest, exotic synthetic assets score lowest.
5. Yield Sustainability (10%)
Evaluates how much of the yield comes from organic protocol fees vs. temporary token emissions. Vaults where > 80% of APY is from reward tokens score lower.
Special scoring adjustments
Morpho curator bonuses
Morpho vaults are managed by curators with varying track records. YeldX applies score adjustments based on real incident data:
| Curator | Adjustment | Reason |
|---|---|---|
| Steakhouse | +1.0 | No incidents, consistent risk management |
| Gauntlet | -0.5 | Suspended withdrawals on Compound USDC |
| Re7 Labs | -1.0 | Oracle failure, $27M exposure |
| MEV Capital | -1.5 | ~$700K bad debt |
Pendle PT two-layer risk
Pendle PT vaults have two layers of risk: the Pendle protocol itself AND the underlying asset. YeldX scores both and applies a penalty if the underlying protocol has a weaker profile.
Incident time decay
Historical security incidents are weighted less over time:
- Recent incidents (< 1 year): full weight
- Older incidents (1–2 years): 50% weight
- Recovered incidents (> 3 years): 10% weight
Design philosophy
The scoring system is inspired by Beefy Finance's Safety Score and adapted for the LI.FI Earn vault universe. The goal is to surface objective, data-driven signals — not to make subjective judgments about individual protocols.
A High risk score doesn't mean "don't use this vault" — it means "understand the risks before you do."
YeldX does not audit smart contracts or provide financial advice. Always DYOR before depositing.