What do Xerberus Risk Ratings Measure?

We only look at transactions on the blockchain.

What do Xerberus Risk Ratings Measure?

Xerberus Risk Ratings are based on the only information we can find on the blockchain: Wallets and Transactions.

  • Wallets: We map out wallets and how they relate to each other in the form of a "social graph." From this graph, we deduct essential information such as the network risk.

  • Wallet Clusters: We cluster wallets based on their behavior. Based on these clusters, we can create more indicators and understand which actors are moving the market.

  • Transactions: We look at the transactions between wallets to understand the flow of value between ecosystems and actors. please read

I'd like you to read an in-depth explanation of our first Risk Model. At the core, we define and measure risk in token networks along these lines:

  • A token is risky if it is volatile

  • A token is risky if its network strays away from the established mean within an ecosystem. For example, if a project is isolated from the rest of the community, it makes it riskier.

  • A token is risky if its network contains features that have caused negative price movements in the past. For example, a token A just gained a new whale. However, the whale caused major negative price movements in token B because of the reckless way the whale DCAs into a token only for the whale to sell all tokens in a single transaction. This behavior can cause negative price spirals.

What do *not* Xerberus Risk Ratings Measure?

It is essential to understand how radical Xerberus's approach is. I'd like you to please read more about why this particular approach is perfect for Blockchains. However, every approach is just a perspective, excluding another viewpoint. So, we want to be clear: there are perspectives that many investors would find necessary to consider when looking at a token that we proudly ignore, including but not limited to the founding team, smart contract scripts, advertised tokenomics, or the overall market potential of a business idea. Please read the next page to understand better why we made the choice.

Last updated