How does the Risk Scoring Methodology work?
Our Counterparty Risk Assessment (CRA) scorecard utilizes proprietary tools, such as blockchain and scenario analyses and is both quantitative and qualitative. Legal analysis of a counterparty is qualitative, while transaction, on-chain and API data utilizes quantitative measures.
CRAs are forward-looking and reflect a counterparty’s ability to provide digital asset services advertised, continue operations, and meet obligations going forward (e.g. withdrawals).
What sort of data do we look at?
ChainArgos utilizes both current and historical data. Current data is helpful in determining real-time event risks, while historical data is instrumental in understanding patterns and trends of a counterparty’s past operations and behaviors, as well as for peer comparison.
How do we score risk?
The factors and where applicable, sub-factors are scored individually, and weighed according to their importance before being combined into a scorecard-indicated risk assessment. Scoring is linearly interpolated to derive an overall risk assessment scorecard.