Overview

StablecoinRatings evaluates stablecoins across six independent pillars. Each pillar outputs a 0–100 score. Scores are weighted and aggregated into an overall numeric rating (0–100) which maps to a letter grade (D– to A+).

The framework is fully algorithmic. All data is sourced from public, free APIs. No manual overrides exist in the raw score. The methodology is versioned; score changes are tracked in the history archive.

Six Pillars

1. Peg Stability (30%)

Measures how reliably the stablecoin maintains its peg under normal and stress conditions. Five sub-factors:

• Average Deviation (20%): 30-day rolling mean of |price − $1.00| expressed as %.
• Max Deviation (25%): Largest single deviation in any 72h window over 90 days. Captures stress-period behavior.
• Depeg Recovery (20%): Average time to return within 0.1% of $1.00 after a >0.5% deviation.
• Volatility (20%): Standard deviation of hourly returns over 30 days.
• Depeg Days (15%): Number of days in the past 365 where price was outside the ±1% band.

Special rule: If current price < $0.90, peg_score = max(5, (1 − price) × 100) directly. This handles catastrophic depegs (e.g. Bean at $0.23 → score = 5).

2. Reserve Quality (25%)

Evaluates the quality, transparency, and sufficiency of backing assets.

• Reserve Composition (30%): Share held in cash, T-bills, and money market funds. Undisclosed = score 20. Crypto-backed over-collateralized positions receive +15 bonus.
• Attestation Frequency (25%): Monthly = 100, Quarterly = 70, None = 20.
• Attestation Quality (20%): Full Big-4 audit = 100; limited third-party = 65; internal = 40; self-reported = 15; none = 0.
• Bankruptcy Remote Status (15%): Legally proven bankruptcy-remote = 100. Regulatory license (NYDFS, MAS) + segregated accounts = 70 (capped; regulatory claim ≠ legal proof). Generic claim = 40.
• Reserve Ratio (10%): ≥100.1% = 100; 100% = 95; ≥98% = 75; below = scaled to 0.

3. Liquidity & Market Depth (15%)

• Volume/MCap Ratio (30%): 24h volume ÷ market cap. >20% = 100; <0.5% = 5.
• Active Trading Pairs (20%): Count of pairs with >$10k daily volume across exchanges.
• Bid-Ask Spread (25%): Measured on Binance order book. <0.01% = 100; >0.5% = 10.
• On-Chain TVL (25%): DEX liquidity from DeFiLlama. >$500M = 100; unknown = 40 (conservative fallback, not penalty).

4. Management & Transparency (15%)

• Regulatory Status (25%): NYDFS/NYFDFS license = 100; EU MiCA/MAS = 85; Tier-2 jurisdiction = 60; none = 30.
• Audit History (20%): Proxy: attestation quality. 3+ Tier-1 = 100; 0 = 20.
• Team Track Record (20%): >5 years clean = 100; >3 = 80; >1 = 60; <1 = 30.
• Historical Enforcement (20%): No actions = 100; settlements <$10M = 60; $10–100M = 30; >$100M = 10.
• Systemic Risk Multiplier (variable): Stablecoins ≥$10B mcap: −4 if management <60. Stablecoins ≥$50B: additional −10 if management <50. Reflects that USDT ($184B) failure = crypto market failure.

5. Smart Contract Security (10%)

• Audit Status (40%): Tier-1 audit (OpenZeppelin, Trail of Bits, Consensys) = 100; other = 70; unaudited = 25.
• Known Exploits (30%): No exploits = 100; exploit <$10k = 70; >$1M = 5.
• Upgradeability (30%): Non-upgradeable or timelock = 100; multisig upgrade = 70; single-key upgrade = 30; has pause function = 40.

6. Decentralization & Censorship Resistance (5%)

• Chain Diversity (40%): 4+ chains = 100; 2–3 = 80; 1 = 40.
• On-Chain Minting (30%): Permissionless = 100; issuer-controlled = 50.
• Freeze/Pause Capability (30%): No freeze = 100; freeze with timelock = 60; immediate freeze = 30; has frozen before = 10.

Scoring Scale

Both letter grades (human-readable) and numeric scores (0–100, algorithm-ready) are derived from the same underlying computation. Letter grades map to fixed numeric boundaries.

Grade	Numeric Range	Meaning	Typical Profile
A+	97–100	Exceptional	Among the safest stablecoins globally
A	90–96	Excellent	Very low risk; near-optimal across all pillars
A-	85–89	Very Good	Minor concerns; strong fundamentals
B+	80–84	Good	Moderate risk; mostly safe for use
B	73–79	Fair	Some concerns present
B-	67–72	Acceptable	Notable concerns; monitor closely
C+	60–66	Speculative	Elevated risk; may depeg under stress
C	53–59	Highly Speculative	Significant structural concerns
C-	47–52	Very Speculative	Major concerns; near-default risk
D+	40–46	Poor	Serious structural weaknesses
D	30–39	Very Poor	Near-default likelihood
D-	0–29	Critical	Essentially in default or already depegged

Type-Specific Weight Profiles

Different stablecoin architectures carry different risk profiles. The primary weights apply to fiat-backed USD stablecoins. Other types use adjusted weights:

Type	Peg	Reserve	Liquidity	Management	SC Security	Decentralization
Fiat-backed USD	30%	25%	15%	15%	10%	5%
Crypto-backed (over-collateralized)	30%	20%	10%	10%	15%	15%
Algorithmic / Reflex	35%	15%	15%	15%	10%	10%
Gold-backed	15%	30%	15%	15%	10%	15%
Non-USD fiat (EUR/SGD/MXN)	30%	25%	15%	15%	10%	5%

Data Sources

All data is sourced from free, public APIs. No paid data subscriptions are used.

Source	Data Provided	Rate Limit (Free)	Key Needed
CoinGecko	Price, market cap, volume, exchange list, contract addresses	10–30/min	No
Binance	Bid-ask spread, 24h ticker, order book	1200/min (public)	No
DeFiLlama	DEX TVL by contract address	30/min	No
Etherscan	Contract source code, audit flags, upgrade functions	5/sec	Recommended (free key)
Issuer disclosures	Reserve attestations, regulatory licenses, audit reports	N/A	No

Fallback Logic

If primary and secondary sources fail, the pipeline applies conservative defaults and appends a WARN_ flag. Each pillar is scored independently — an unknown reserve quality does not penalize peg stability.

Pillar	Primary Fallback	Conservative Default	Flag Added
Peg Stability	Binance avgPrice	50/100	WARN_No_price_history
Reserve Quality	Issuer website	30/100	WARN_No_attestation
Liquidity	Binance volume	40/100	WARN_No_market_data
Management	Press releases	40/100	WARN_Regulatory_unverified
Smart Contract	Etherscan flag	30/100	WARN_Contract_unverified
Decentralization	CoinGecko platforms	50/100	WARN_Chain_unknown

Benchmark Comparison

The framework was validated against Bluechip (bluechip.org/en) — a leading independent stablecoin rating platform. Live validation across 17 coins shows:

• 4/13 exact letter-grade matches (DAI B+, USDC B+, FRAX B-, BUSD C)
• 9/13 within 1 letter grade — divergences are explainable by rate-limit gaps, coin type mismatch, or documented editorial overlays
• Primary divergence: CoinGecko free-tier rate limits prevent real price history from being fetched for all coins simultaneously. Production pipeline with staggered requests resolves this.
• USDT gap: Bluechip rates USDT D (editorial systemic-risk premium). Our framework produces C, which is algorithmically correct. The D-grade requires an explicit editorial policy rule, not a data fix.

Version History

Version	Date	Change	Reason
v1.0	Apr 2026	Initial framework — 6 pillars, free API sources, letter grades	First build
v1.1	Apr 2026	Added enforcement history (4.4), systemic risk multiplier (4.5), bankruptcy-remote cap rule (2.4), crypto collateral bonus (2.1), severe depeg rule (1.1), coin type classifier	Live validation against Bluechip revealed gaps: USDT too generous, USDC reserve too high, BEAN depeg undetected