DeFi Token Rating System Introduced by DefiLlama and Forgd

DefiLlama and Forgd have introduced a new rating system for DeFi tokens, assigning grades from AAA to CCC. The system, called Universal Token Rating, evaluates both disclosure and performance scores. Uniswap currently holds the only AAA grade with a composite score of 60.80.

The rating system multiplies disclosure and performance scores instead of averaging them. This means that even if one area is strong, weakness in another can still result in a low overall grade. Projects are penalized for missing disclosures, weak liquidity arrangements, and insider-friendly tokenomics.

DefiLlama's Head of Research, Ryan Celaj, explained that both components are necessary conditions for credibility. 'It's not that performance and disclosures both factor in. They're required,' he said.

The system uses a formula to produce a composite score out of 100. AAA begins at 60, and the thresholds make it difficult to obtain the highest grades while creating distinctions among assets further down the table.