A new cryptocurrency risk rating firm, CORE3, officially launched on Thursday, assigning numerical risk scores to 1,426 crypto projects and 253 exchanges based on publicly available data. The firm aims to push DeFi protocols, centralized exchanges, and crypto firms to improve security and transparency by assessing the probability that users could lose funds through them.
Among its first major assessments, CORE3 gave World Liberty Financial (WLFI), a DeFi project linked to the Trump family, a concerning 'DDD' risk rating. This rating corresponds to a 68.01 probability of loss score, placing WLFI among the bottom 50 worst-scoring projects on CORE3's platform. The worst-scoring project currently is RealT, a fractionalized real estate investing platform.
CORE3's evaluation highlighted several top risks at the $2.8 billion DeFi project, including a lack of continuous on-chain monitoring, which raises the chance of a delayed response to security incidents. The agency also noted the absence of a structured bug bounty program, reducing proactive vulnerability discovery, and criticized the project's token structure where insiders own the majority of tokens.
Dyma Budorin, CEO of HAI Group, the firm behind CORE3 and blockchain security firm Hacken, stated that the industry still suffers from the same problems it had in 2017, with many projects focused on making money fast without considering risks. "We need to put pressure on them," Budorin told DL News.
CORE3 advertises itself as the only crypto-specific ratings firm that makes its scoring system completely public, allowing anyone to see why projects received their scores. The firm's launch comes as more traditional finance firms look to invest in crypto, with many institutions requiring more risk profiling to feel comfortable. While other crypto ratings agencies exist, such as Credora and Metrika, and some projects like Sky have paid for debt ratings from S&P Global Ratings, CORE3 focuses on transparent, methodology-driven assessments.
Projects tracked by CORE3 can submit more information to change their risk scores, and the firm will also reach out to projects to request additional data. Budorin anticipates criticism over the ratings system and is requesting feedback from the industry to help improve it, stating, "We are not the final word. If a change to our methodology makes sense we will do it." World Liberty Financial did not immediately return a request for comment.
