Methodology

Rating Framework(s) + Open Sourcing Data + Permissionless Governance Process = fair, verifiable, and unbiased rating scores

The rating app is a consolidated overview of all protocols that have been reviewed by Prime raters. The benchmark (A+ to D) is calculated by using the average of both technical and fundamental report scores (50/50), whereas the fundamental score for instance, can consist of multiple reports for one and the same protocol. Allowing numerous raters to review the same protocols increases veracity and ensures the scores are kept up-to-date. The App also provides a list of raters that have contributed to Prime Rating and lets anyone transparently review the reports that make up the rating scores.

Prime Rating Scale

To provide a simple and comparable opinion, protocols are rated on a scale from A+ to D depending on the aggregated outcome of the technical (smart contract quality) and fundamental review(value proposition, tokenomics, governance, etc.).

Rating
Description
Score
A+
Prime-grade protocol
Average score > 85% & Min. score > 70%
A
High-grade protocol
Average score > 75% & Min. score > 60%
B+
Upper medium-grade protocol
Average score > 65% & Min. score > 50%
B
Medium-grade protocol
Average score > 55% & Min. score > 40%
C+
Lower medium-grade protocol
Average score > 45% & Min. score > 30%
C
Low-grade protocol
Average score > 35%
D
Protocol not rateable
Average score < 35%

Permissionless Rating

To provide a neutral and all-encompassing opinion on open finance protocols, Prime Rating has developed a permissionless and modular framework that utilizes DAO best practices and decentralized data storage to operate as independently from any centralized entity as technologically possible. By being permissionless, Prime Rating is more resilient, neutral, and able to leverage the wisdom of the crowd. All Prime Ratings and documents are publicly available and can be accessed non-exclusively by anyone with an internet connection, making Prime Rating a public good for the benefit of the systemic advancement of open finance.

1. Prime Rating provides report templates 
2. Raters evaluate a protocol using either a fundamental or technical report template
3. Once ready, raters can ask for feedback on their report
4. After implementing feedback, raters can submit the report which triggers a Snapshot vote
5. A council of experienced raters (200+ RXP) vote on whether to accept or reject a report
6. If accepted, the reports gets added to the DB and the score is updated accordingly
7. If rejected, the rater can improve the report and submit again (only two consecutive submissions are allowed)
8. As a reward for successfully submitting a report, a rater will receive 150 USDC + 200 $PRIME (minimum) plus rating experience points (RXP)
9. Raters that consistently create high quality reports can level-up and increase their rewards, become reviewers, become eligible for voting and receive other benefits

Prime Rating Building Blocks

The following building blocks make Prime Rating possible:

Prime Rating Backend (Beta version): Prime Rating's backend is built in a trustless manner using IPFS to store all reports (in .pdf). In its final state, the backend will function fully automated and without any human interaction, making the framework fully permissionless and trustless, only governed by the DAO.

Report Templates: Prime Rating relies on a set of report templates accessible to anyone with an internet connection. These templates are the standard format through which rating scores are created and updated. The templates are improved on a regular basis and also governed by the DAO.

Prime Rating Governance: Prime Rating Governance is at the core of the framework and responsible for accepting/rejecting reports, thus ensuring high quality AND veracity of the rating scores.

Prime Community: The community is at the heart of the DAO and has a voice in all important matters. Decision making is done through discussion to find consensus and finally via voting.

Communication Channels: Discord is used for communication. PrimeDAO Discord uses Collabland to allow different tiers of Prime Raters to autonomously claim their Rank in the PrimeDAO Discord Channel.

Technical Rating

The technical report facilitates reviewing protocols based on best practices and adherence to overall process transparency. The process quality review is an independent review system that rates the documentation, software quality, access controls, reading the audit(s), and developer's practices. This report does not constitute an audit, but rather a complementary report to aid in technical evaluation of protocols.

View Technical Report Template

Fundamental Rating

The fundamental report enables a comprehensive evaluation of a protocol's overall quality and uncovers potential risks. The report is a tool to perform a deep analysis of the value offering, usefulness, organizational strengths/weaknesses, and differentiating factors such as competitive advantages vs. other protocols in the space. Together with the technical rating, the fundamental report provides an overarching scan of what a protocol has to offer.

The fundamental report consists of five main sections, each evaluating a different angle of a protocol, these are: Value proposition, tokenomics, team, governance and regulatory.

View Fundamental Report Template

More from Prime

Prime offers a full set of relational tools for digital organisations.