Vault Risk Assessment
Unlock vault risks. Reveal deeper insights. Institutional-grade analysis providing transparency into vault risk management and underlying credit quality.
What is a Vault Risk Assessment?
Digital asset vaults are the on-chain equivalent of managed funds.
A vault is an on-chain investment vehicle that pools depositors’ capital and deploys it according to a defined strategy — automated through smart contracts, directed by professional managers, or a combination of both. In return, depositors receive share tokens representing their proportional claim on the vault’s assets and returns.
Vaults offer advantages including automation, capital efficiency, and secondary-market liquidity. But they also introduce distinct risk considerations. Vaults provide transaction transparency on-chain, yet strategy and risk disclosures remain limited, are rarely standardized, and often assume a high degree of investor sophistication.
On-chain data shows what a vault has done, but offers limited insight into how its risk profile may evolve.
The Vault Risk Assessment (VRA) addresses this gap.
A VRA is a forward-looking and relative opinion about the overall risk of impairment to an investor’s position in a lending vault. It indicates credit risks inherent in a vault's underlying assets and lending markets, while accounting for protocol and blockchain risks and the curator's ability and willingness to maintain the vault’s risk profile.
The VRA is applicable across lending-vault structures and strategies and is identified by the suffix 'v.'
Moving beyond transaction transparency to deliver risk transparency, the VRA provides relevant insights that can help lower information barriers supporting broader adoption of vaults and, in turn, the continued growth of the vault market. A VRA is not a credit rating or a commentary on yield levels.
Our VRA Analytical Approach
Our Vault Risk Assessment (VRA) is a forward-looking and relative opinion about the overall risk of impairment to an investor’s position in a lending vault. It indicates credit risks inherent in a vault's underlying assets and lending markets, while accounting for protocol and blockchain risks and the curator's ability and willingness to maintain the vault’s risk profile. The VRA is applicable across lending-vault structures and strategies and is identified by the suffix 'v', for example 'AAA(v)', which indicates the lowest risk.
As new types of vaults emerge, our VRAs will use the key risk concepts in the following report. The vault segment is nascent and evolving rapidly. We may use our analytical approach for existing vault types as a starting point for assessing novel vault characteristics and structures.
Benefits of a Vault Risk Assessment
Support Institutional Participation
VRA answers the questions that can help inform institutional decision-making: vault credit quality, curator quality, and governance — helping broaden engagement, differentiate strategies, and grow the market.
Differentiated Risk Lens
Fundamental qualitative and quantitative analyses that look beyond a point-in-time snapshot to form an opinion on a vault's structural risk profile.
Additional Insight Into The Intended Risk Profile
Provides an independent analytical perspective on a vault’s intended risk profile and the curator’s risk-management framework.
Independent and Analyst-Led
A forward-looking, independent opinion designed to enhance comparability and transparency across assessed vaults.
Use Cases
How a vault risk assessment can inform market participants.
Why S&P Global Ratings?
Digital Asset Expertise
Our Digital Asset Lab is made up of credit and Cryptofinance analysts and researchers so we have a unique analytical understanding of the intersection of traditional finance and digital assets.
Track Record in Assessing Risk
With over 150 years of experience in providing independent opinions to the markets and more than 1 million credit ratings outstanding, we deliver essential intelligence to help market participants make informed decisions with conviction.
Investor Preference
Of the top 20 global institutional investors, 95% reference S&P Global Ratings.* We are an essential source of information for global financial markets.
*According to 3rd party investor survey conducted in 2023.
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