# Xerberus Risk Methodology Xerberus rates DeFi objects by mapping what they are made of. For each Asset, Protocol, Pool, or Organisation, the methodology builds a **dendrogram**: a tree of the mechanisms that make the object work. Each mechanism is then mapped to the risk factors that are unique to that mechanism and scored against evidence-backed safeguards. --- ## The Method in 60 Seconds 1. **Choose the object.** Xerberus rates Assets, Protocols, Pools, and Organisations as separate object classes. 2. **Map its mechanisms.** The dendrogram breaks the object into the mechanisms that make it function: governance, minting, liquidation, strategy execution, redemption, legal structure, and so on. 3. **Activate only what exists.** If a mechanism is present, that branch is evaluated. If it is absent, the branch is pruned. A pool is not punished for missing a mechanism it does not use. 4. **Score the mechanism's risk factors.** Each activated mechanism contains subscores for its unique failure modes. A timelock has timelock risks; a receipt token has receipt-token risks; an organisation has legal and leadership risks. 5. **Show the decomposition.** The final rating is only the summary. The useful output is the traceable path: object -> mechanisms -> active risk factors -> evidence -> score. The important idea is simple: **risk is not a single opaque number; it is a map of mechanisms and their weak points.** The methodology is open and transparent. The ratings are free, and the data behind them is verifiable in the frontend. Xerberus is never paid by the entities it rates. See [[overview/Independence]] for why this matters. --- ## Start Here > [!tip] **Investors and Allocators** > *"What is this score telling me?"* > > 1. [[overview/What Xerberus Measures]] — The object -> mechanism -> risk-factor model > 2. [[methodology/The Dendrogram]] — How the tree exposes the rating > 3. [[overview/Rating Scale]] — How to read the number > 4. [[limitations/Known Limitations]] — What the rating does not claim > [!example] **Protocol Teams and DAOs** > *"Where is the score coming from?"* > > 1. [[overview/Object Classes]] — Which object class applies > 2. [[domains/index]] — Which mechanisms are in scope > 3. [[methodology/Subscores]] — Which risk factors are scored > 4. [[governance/Dispute Process]] — How to challenge a gate, score, or source > [!abstract] **Domain Experts and Subscore Authors** > *"How do I add or improve a risk factor?"* > > 1. [[methodology/The Dendrogram]] — Where mechanisms live > 2. [[methodology/Subscores]] — How risk factors become subscores > 3. [[design/Design Principles]] — The constraints for new methodology > 4. [[governance/Subscore Author Program]] — How contributions are reviewed > [!info] **Platforms and Integrators** > *"How do I consume the data?"* > > 1. [[methodology/Scoring]] — Aggregation from subscores to ratings > 2. [[methodology/Deterministic Hashing]] — Stable IDs for templates and subscores > 3. [[reference/Build Status]] — Current coverage > [!quote] **Risk Researchers** > *"I want to understand the full methodology."* > > Follow the [[methodology/index|Methodology reading order]]: Dendrogram -> Subscores -> Conditional Logic -> Scoring -> Hashing. Then read [[design/Design Principles]] and [[design/Why K-Only]]. --- ## Vault Structure | Section | What It Contains | |---------|-----------------| | [[overview/index\|Overview]] | The object classes, mechanism model, score meaning, and independence | | [[methodology/index\|Methodology]] | The dendrogram workflow: mechanisms, gates, subscores, scoring, hashing | | [[domains/index\|Domains]] | The mechanism templates for each object class | | [[design/index\|Design]] | Architectural constraints and key design decisions | | [[examples/index\|Examples]] | Full rating walk-throughs for real objects | | [[governance/index\|Governance]] | Evaluation process, disputes, methodology updates, author program | | [[reference/Build Status\|Reference]] | Glossary, subscore catalog, build status | | [[limitations/Known Limitations\|Limitations]] | Honest assessment of what the methodology cannot do | --- ## Quick Links - [[overview/Rating Scale]] — What AAA through D means - [[methodology/The Dendrogram]] — How the mechanism tree works - [[overview/Object Classes]] — Asset, Protocol, Pool, and Organisation scope - [[design/Design Principles]] — The rules governing methodology design - [[limitations/Known Limitations]] — What the methodology cannot do - [[reference/Glossary]] — Key terms - [[reference/Build Status]] — Current coverage - [[changelog]] — Version history --- **Methodology version:** 1.1.0 **Effective date:** 2026-04-30 **Maintained by:** Xerberus DAO LLC