Asset Risk Framework
At the token onboarding stage, the Risk Council uses the Asset Risk Framework to conduct an analytical appraisal to determine the risk of an asset.
This framework takes into account the following risk factors:
All of these factors determine how an asset can be used on the protocol, and enables the grading of each asset into one of three tiers: isolated collateral asset, isolated debt asset, and general asset. An asset's risk level also determines its Collateral Max LTV and Borrow Factor parameters.