# What Xerberus Measures Xerberus measures the mechanisms that make a crypto object work, then scores the risk factors that are unique to those mechanisms. An object can be an [[Object Classes|Asset, Protocol, Pool, or Organisation]]. Each object class has its own mechanism map because each one fails in different ways. --- ## The Core Idea Every crypto object is built from mechanisms: | Object | Example Mechanisms | |--------|--------------------| | **Asset** | Mint/burn authority, emissions, vesting, collateral backing, peg design | | **Protocol** | Smart contracts, oracle dependencies, liquidation logic, governance controls | | **Pool** | Strategy logic, share mechanics, exposure parameters, fees | | **Organisation** | Leadership structure, operating capacity, legal entity, licensing | Each mechanism has a different risk surface. A timelock can fail because the delay is too short. A share token can fail because its price-per-share is manipulable. A pool strategy can fail because it concentrates exposure in a fragile dependency. The dendrogram keeps those questions attached to the mechanism where they belong. ``` Object -> Mechanism -> Unique risk factor -> Evidence-backed safeguard score ``` The rating is the aggregate view of this map. The map itself is the important part. --- ## What Gets Scored Each activated mechanism contains **subscores**. A subscore asks one narrow question about a safeguard: > Is this safeguard present and effective? The answer is a containment score, called **K**, between 0 and 1: | K | Meaning | |---|---------| | **1.0** | The safeguard is present and effective | | **0.0** | The safeguard is absent or ineffective | | **Between 0 and 1** | The safeguard is partially effective | Every subscore must be tied to a real historical incident. If a failure mode has never happened, it does not become a Xerberus risk factor. --- ## What Does Not Get Scored Xerberus does not score: - **Price direction.** A rating is not a prediction that an asset will go up or down. - **Market sentiment.** Social attention and price action are not mechanism safeguards. - **Hypothetical risks.** Subscores require a real incident or a structurally analogous incident. - **Mechanisms that do not exist.** If a pool has no withdrawal queue, queue-specific branches are pruned. - **Systemic contagion inside the dendrogram.** Dependency propagation is a separate graph layer. --- ## Why This Is Useful Single scores hide where risk actually lives. Two pools can both score 0.74 for completely different reasons: one may have strong contracts but weak withdrawal controls; another may have clean pool mechanics but fragile underlying assets. The Xerberus methodology keeps the rating decomposable: ``` Pool score ├── Strategy mechanisms ├── Share-mechanics mechanisms ├── Exposure mechanisms ├── Fee mechanisms └── Connected asset / protocol / organisation context ``` This lets users see whether the risk comes from the pool itself, the protocol it uses, the asset it holds, or the organisation behind it. --- ## Containment Quality The scored property is **containment quality**: how well a mechanism is protected against known failure modes. The older U-I-K model separated Uncertainty, Impact, and Containment. Xerberus now scores only K because it is observable and actionable. Low `K_timelock_duration` means "the timelock delay is not strong enough." Low `K_admin_scope` means "admin privileges are too broad." For the reasoning behind this simplification, see [[design/Why K-Only]]. --- ## Intrinsic And Systemic Risk The dendrogram measures **intrinsic risk**: the object's own mechanisms and safeguards. **Systemic risk** asks how failure travels between objects. A pool can depend on a protocol, a protocol can issue an asset, and an organisation can operate a protocol. Those relationships are modeled through a dependency graph, not inside the dendrogram. This separation keeps the basic method simple: first understand each object's own mechanism map, then understand how objects connect. --- ## Related - [[Object Classes]] — What gets rated - [[methodology/The Dendrogram]] — How containment is measured in practice - [[methodology/Subscores]] — How containment is measured at the subscore level - [[Rating Scale]] — How scores should be interpreted - [[Independence]] — Why the rater's independence matters for these measurements