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BEE AI LABS Safety Score
The BEE AI LABS Safety Score's design is described in this document. The safety score's objective is to inform people who are considering entering a certain BEE AI LABS vault. Although the Safety Score is not ideal, it is nevertheless a useful tool for the consumer.
A vault can receive a safety score ranging from 0 to 10. The maximum score is 10, and the minimum is 0. Technically, a vault may receive a score of less than 0, in which case it would display 0.
Risks are distributed in three main categories:
- BLAB Risks: Risks that we add by serving as a platform.
- Asset Risks: Risks of the asset being handled by the vault.
- Platform Risks: Risks of the underlying farm or platform used.
A portion of the final score comes from each category. There are numerous subcategories within each category.
Every vault starts with a perfect score of 10 and loses points whenever it possesses characteristics that raise the stakes. These are dangers specific to the BEE AI LABS platform.
These dangers could be a result of the intricacy of the vault approach, a test deployment, a third-party audit, etc. The BEE AI LABS Risks account for twenty percent of the safety score.
Tracks the complexity of the strategy behind a vault.
- Low complexity strategy
Low-complexity techniques are straightforward to interpret and debug since they contain few, if any, moving parts. Implicit risk and code complexity are directly correlated. Implementation hazards are successfully reduced by a straightforward technique.
Qualification Criteria: One audited, well-known smart contract, like MasterChef, should be the only one with which a low-complexity strategy interacts. This smart contract's front is provided by the strategy, which forwards requests for deposits, harvests, and withdrawals with just one line of code.
- BEE AI LABS strategy is of medium complexity
Two or more certified and well-known smart contracts are involved in interactions with medium-complexity techniques. Still simple to read, test and debug is its code. By keeping things straightforward, it reduces the majority of implementation risks; yet, the interactions between two or more systems add another layer of complexity.
Qualification Criteria: Two or more well-known smart contracts are interacted with through a medium complexity strategy. This method automates the performance of a set of non-forking processes. The same execution route is used each time deposit(), harvest(), and withdraw() are called.
- BEE AI LABS strategy is complex
Several well-known smart contracts interact with high-complexity techniques. These sophisticated tactics offer branching execution paths. To fully apply the plan, it may occasionally be necessary to use many smart contracts.
Qualification Criteria: High cyclomatic complexity, interactions between two or more third-party platforms, and implementation divided across numerous smart contracts are all indicators of a high-level complexity strategy.
Tracks how long has this strategy been running without any major issues?
- BEE AI LABS strategy is battle-tested
The more time a particular strategy is running, the more likely that any potential bugs it had have been found, and fixed. This strategy has been exposed to attacks and usage for some time already, with little to no changes. This makes it sturdier.
-Was deployed using an BLAB StratFactory
-10+ strategies sharing the same code deployed
-3 months working as expected without upgrades
- The strategy has been running for less than a month
The more time a particular strategy is running, the more likely that any potential bugs it has have been found, and fixed. This strategy is a modification or iteration of a previous strategy. It hasn't been battle-tested as much as others.
- The strategy has some features which are new
The more time a particular strategy is running, the more likely that any potential bugs it had have been found, and fixed. This strategy is brand new and has at least one experimental feature. Use it carefully at your own discretion.
Risks relating to the asset or assets handled by the vault. Entering into a vault with BTC has a different set of risks than entering into a vault with a newer and smaller coin. Twenty percent of the score is determined by this category.
Tracks the risk of impermanent loss within the vault
- Very low or zero projected IL
The asset in this vault has very little or even no expected impermanent loss. This might be because you are staking a single asset, or because the assets in the LP are tightly correlated like USDC-USDT or WBTC-renBTC.
Qualification Criteria: Single asset vaults and vaults that manage stablecoins with a peg that isn't experimental: USDT, USDC, DAI, etc.
When you are providing liquidity into a token pair, for example, ETH-BNB, there is a risk that those assets decouple in price. BNB could drop considerably in relation to ETH. You would lose some funds as a result, compared to just holding ETH and BNB on their own. The assets in this vault have some risks of impermanent loss.
Qualification Criteria: Vaults that handle what is normally referred to as “Pool 1” LPs would fit here: ETH-USDC, MATIC-AAVE, etc. Governance tokens for smaller projects are normally known as “Pool 2” and are thereby excluded.
When you are providing liquidity into a token pair, for example, ETH-BNB, there is a risk that those assets decouple in price. BNB could drop considerably in relation to ETH. You would lose some funds as a result, compared to just holding ETH and BNB on their own. The assets in this vault have a high or very high risk of impermanent loss.
Qualification Criteria: Vaults that handle “Pool 2” LPs go here. These LPs normally include the governance token of the farm itself.
- Algorithmic stable, experimental peg
When you are providing liquidity into a token pair, for example, ETH-BNB, there is a risk that those assets decouple in price. BNB could drop considerably in relation to ETH. You would lose some funds as a result, compared to just holding ETH and BNB on their own. At least one of the stablecoins held by this vault is an algorithmic stable. This means that the stable peg is experimental and highly risky. Use it carefully at your own discretion.
Qualification Criteria: “Stablecoins” with experimental pegs, or tokenomics that have failed repeatedly to hold their peg in the past, go here.
Tracks how difficult it is to buy/sell the vault's token.
- High trade liquidity
How liquid an asset is affected by how risky it is to hold it. Liquid assets are traded in many places and with good volume. The asset held by this vault has high liquidity. This means that you can exchange your earnings easily in plenty of places.
- Low trade liquidity
- How liquid an asset is affected by how risky it is to hold it. Liquid assets are traded in many places and with good volume. The asset held by this vault has low liquidity. This means that it isn't as easy to swap and you might incur high slippage when doing so.
The total value of all the coins in circulation. Indirectly tracks how volatile the vault's underlying asset is.
- High market cap, low volatility asset
The market capitalization of the crypto asset directly affects how risky it is to hold it. Usually, a small market cap implies high volatility and low liquidity. The asset held by this vault has a large market cap. This means it's potentially a highly safe asset to hold. The asset has a high potential to stick around and grow over time.
Qualification Criteria: Top 50 MC by Gecko/CMC
- Medium market cap, medium volatility asset
The market capitalization of the crypto asset directly affects how risky it is to hold it. Usually, a small market cap implies high volatility and low liquidity. The asset held by this vault has a medium market cap. This means it's potentially a safe asset to hold. The asset has the potential to stick around and grow over time.
Qualification Criteria: Between 50 and 300 MC by Gecko/CMC
- Small market cap, high volatility asset
The market capitalization of the crypto asset directly affects how risky it is to hold it. Usually, a small market cap implies high volatility and low liquidity. The asset held by this vault has a small market cap. This means it's potentially a risky asset to hold. The asset has a low potential to stick around and grow over time.
Qualification Criteria: Between 300 and 500 MC by Gecko/CMC
- Micro market cap, Extreme volatility asset
The market capitalization of the crypto asset directly affects how risky it is to hold it. Usually, a small market cap implies high volatility and low liquidity. The asset held by this vault has a micro market cap. This means it's potentially a highly risky asset to hold. The asset has a low potential to stick around.
Qualification Criteria: +500 MC by Gecko/CMC
Tracks risks related to the asset supply. Can it be altered by anyone? How centralized is it?
- Few very powerful whales
When the supply is concentrated in a few hands, they can greatly affect the price by selling. Whales can manipulate the price of the coin. The more people that have a vested interest over a coin, the better and more organic the price action is.
Qualification Criteria: Less than 50 accounts hold more than 50% of the supply.
Risks relating to the third-party platforms used by the vault. How much track record they have, how solid the code is, whether are there any dangerous actions that an admin can take, etc. Sixty percent of the score is determined by this category.
Tries to give clues about the team and community's track record. How likely are they to rug for example.
- The platform has a known track record
When taking part in a farm, it can be helpful to know the amount of time that the platform has been around and the degree of its reputation. The longer the track record, the more investment the team and community have behind a project. This vault farms a project that has been around for many months.
Qualification Criteria: The underlying farm has been around for at least 3 months.
- The platform is new with little track record
When taking part in a farm, it can be helpful to know the amount of time that the platform has been around and the degree of its reputation. The longer the track record, the more investment the team and community have behind a project. This vault farms a new project, with less than a few months out in the open.
Qualification Criteria: The underlying farm has been around for less than 3 months.
Last modified 9mo ago