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While the categories below illustrate core evaluation angles, the assessment is not limited to these items. Additional dimensions may be considered based on the protocol’s structure, documentation, and risk profile.

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Area 1: On-chain Protocol Integrity

Evaluation at the dApp level, verifying the technical and operational completeness and reliability of software operating on the blockchain.
Evaluation ItemChecklist & Key PointsPriority
1. Audit
  • Which firm conducted the audit? (e.g. top tier firms preferred)
  • How many audits were performed? (At least 2 recommended)
  • What were the results? (Were all Critical/High issues resolved?)
  • Is the audit report publicly available?
Highest
2. Bug Bounty Program
  • Is there an ongoing bug bounty program on Immunefi, HackerOne, etc.?
  • Is the bounty size adequate relative to TVL? (Large rewards indicate strong confidence in security)
Medium
3. Track Record
  • How long has the protocol operated on mainnet without issues?
  • Have there been hacks or security incidents? If yes, how were they handled?
High
4. Admin Key Structure
  • Does an admin key exist that can alter core settings?
  • If so, is it secured via multisig?
  • Who are the multisig signers?
Medium
5. Team Structure & Reputation
  • Is the team anonymous or public? (Public teams generally inspire more trust)
  • Do team members have prior experience successfully running projects?
  • Which reputable VCs invested?
High
6. Governance Transparency
  • How are major governance decisions made? (Are forum discussions and on-chain voting results transparent?)
  • Is the community (Discord, Telegram) active, and does the team engage with users?
Medium

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Area 2: Off-chain Asset & Structural Integrity

Evaluation of the quality of underlying assets and the legal/operational stability of financial products that function in the real economy.
Evaluation ItemChecklist & Key PointsPriority
1. Asset Class & Rating
  • (Asset Type) Are asset types and risk ratings clear? (e.g., US Treasuries, investment-grade corporate bonds, CRE loans)
  • (Credit Rating, if applicable) Are there ratings from recognized agencies? (e.g., investment grade or higher)
Highest
2. Portfolio Composition
  • (For sources such as private credit) Is exposure to any single borrower, asset, or region kept below 10%?
  • (Historical Performance) Are default and loss rate data over the past 2+ years transparent?
High
3. Asset Ownership Structure
  • (SPV/Trust) Is there an SPV structure that legally isolates assets from issuer bankruptcy risk?
  • (Legal Claim) In case of issuer default, do investors have clear legal rights to the underlying assets?
Highest
4. Regulatory Compliance
  • Does the structure comply with laws in stable jurisdictions (e.g., US, Singapore)?
  • Is there a clear legal opinion on securities classification, and have necessary licenses been obtained?
High
5. Manager Track Record
  • (Experience) Does the manager have significant experience and AUM in this asset class?
  • Has the manager co-invested their own capital into the fund?
High
6. Transparency & Partners
  • (External Audit) Are regular audits conducted by external auditors?
  • Are NAV reports and transparency data published regularly?
  • (Third-party Partners) Are custodians or trustees (e.g., BNY Mellon) reputable?
High
7. Redemption & Liquidity
  • (Redemption Policy) Are policies on frequency (e.g., daily), settlement time (e.g., T+2), and fees clear and reasonable?
  • Is timely redemption generally guaranteed under normal conditions?
  • (Secondary Market) Is there a secondary market or other mechanism to provide liquidity during stress periods?
Highest
8. Risk Management Framework
  • (Valuation) Are asset valuations conservative and based on fair market value?
  • (Stress Testing) Are results of stress tests (e.g., rate hikes, defaults) disclosed?
  • (Insurance/Guarantees) Are there additional protections such as credit insurance or government guarantees?
Medium

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Final Evaluation & Application

Each checklist item can be scored quantitatively. Additionally, for “Highest Importance” items, a Pass/Fail criterion can be applied: if even one such item fails, the protocol is automatically disqualified.