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Safety Score

Every strategy is assigned a safety score, the purpose of the safety score to assist users in deciding whether to enter a specific Cadabra strategy. While the Safety Score is not necessarily perfect, as each strategy's underlying projects have their own nuances, it serves a purpose to give a risk estimation to the user and to help make a decision.
The Safety Score ranges from 0 to 10, with 10 being the safest and 0 being the least safe.

Methodology

We categorize risks into three primary groups:
  • Cadabra Risks: These are risks introduced by our platform.
  • Asset Risks: Risks of the asset being managed by the strategy.
  • Platform Risks: Risks of the underlying platform used.
For every yield source of a Cadabra strategy we compute two safety scores : the asset score and the platform score. We multiply these scores to get a safety score for each yield source. We then select the lowest score among all yield sources. This lowest safety score is multiplied by the strategy's implementation score to determine the overall safety score.
Cadabra risks
These risks are associated with the implementation of a particular strategy in Cadabra. We consider factors such as the complexity of the strategy logic and algorithms used, the safety of oracles used in the strategy, the similarity of the strategy to existing strategies, and whether it has passed a security audit.
Asset risks
Risks related to the assets in the strategy, for example entering a strategy that contains new, hyped algorithmic stablecoin carries different risks compared to entering a strategy involving only major stablecoins. We consider factors such as market cap, category, asset lifetime, liquidity and other.
Yield source risks
These risks relate to the underlying yield sources and protocols. For example, a pool with major stablecoins may be deemed safe, but if the protocol is new and untested, it carries its own risks. We assess factors such as the development team's reputation, whether it has passed a security audit, the platform's algorithms and mechanics, the degree of centralization, and others.
Scoring is conducted by the Cadabra team and is provided for informational purposes and does not constitute a trading recommendation