Traditional rating agencies are starting to grade DeFi.
S&P Global has launched Vault Risk Assessment for on-chain lending vaults, with AAA(v) as the highest rating tier. This comes as the size of on-chain lending vaults has reached around $10 billion.
Until now, when participating in DeFi lending, users have largely had to assess the risks themselves by looking at smart contracts, collateral ratios, strategies, and audits.
Now, traditional rating agencies are bringing “risk labels” onto the blockchain.
Of course, this is a positive development: it lowers the barrier for ordinary investors to understand on-chain risks.
But the other side of the story is worth noting, too.
Once capital starts making decisions based on ratings, rating agencies gain new pricing power.
Put this alongside the NYSE parent company exploring tokenized stocks, and the trend becomes clearer:
Traditional finance is shifting from “not liking crypto” to “entering crypto and then defining the rules.”
Being rated means being brought into the system.
And the price of being brought into the system is accepting its standards.
S&P Global has launched Vault Risk Assessment for on-chain lending vaults, with AAA(v) as the highest rating tier. This comes as the size of on-chain lending vaults has reached around $10 billion.
Until now, when participating in DeFi lending, users have largely had to assess the risks themselves by looking at smart contracts, collateral ratios, strategies, and audits.
Now, traditional rating agencies are bringing “risk labels” onto the blockchain.
Of course, this is a positive development: it lowers the barrier for ordinary investors to understand on-chain risks.
But the other side of the story is worth noting, too.
Once capital starts making decisions based on ratings, rating agencies gain new pricing power.
Put this alongside the NYSE parent company exploring tokenized stocks, and the trend becomes clearer:
Traditional finance is shifting from “not liking crypto” to “entering crypto and then defining the rules.”
Being rated means being brought into the system.
And the price of being brought into the system is accepting its standards.