# Asset Rating

DeFi “Lego”(composability) enables the Patronus Protocol to connect with other protocols or platforms in the DeFi ecosystem. Therefore, the Patronus platform is inevitably exposed to the risk of financial contagion, and may be severely affected by the failure of the pledged asset system and market fluctuations.

In order to maintain a reasonable level of security, Patronus evaluates assets from three dimensions, and divides the risk level into five levels from low to high, that is **E** (very high risk), **D** (high risk), **C** (medium risk), **B** (low risk) and **A** (very low risk). An asset with a risk rating of E will not be connected to the protocol.

**Smart Contract Risk:** This measures the technical security of the underlying code of the asset. Whether it has passed the code audit of a professional security company is an important criterion for measuring risk. In addition, the safe running time and transaction volume of contracts are also important indexes for evaluating security.

**Market Risk:** This measures the ability of an asset to resist market fluctuations. Liquidity, volatility and market value are all important indicators. If the value of pledged assets declines, they may trigger liquidation, and the market needs to have sufficient liquidity to support timely liquidation.

**Counterparty Risk:** This measures the degree of decentralization of the asset itself, including the number of holder addresses, governance system, and the degree of trust in the asset itself.

<table data-header-hidden><thead><tr><th width="112"></th><th width="93"></th><th width="147">Smart Contract Risk</th><th width="175">Counterparty Risk</th><th width="128">Market Risk</th><th width="119">Liquidity Risk</th><th>Volitility Risk</th></tr></thead><tbody><tr><td><strong>Asset</strong> </td><td><strong>Rating</strong> </td><td><strong>Performance</strong></td><td><strong>Decentralization</strong></td><td><strong>Market Cap</strong></td><td><strong>Liquidity</strong></td><td><strong>Volitility</strong></td></tr><tr><td>lzUSDC</td><td>A</td><td> A</td><td> A</td><td> A</td><td>A</td><td>A</td></tr><tr><td>lzUSDT</td><td>B</td><td> A</td><td> C</td><td> A</td><td>A</td><td>A</td></tr><tr><td>lzWETH</td><td>B</td><td> A</td><td> B</td><td> A</td><td>A</td><td>C</td></tr><tr><td>APT</td><td>C</td><td> B</td><td> C</td><td> B</td><td>B</td><td>C</td></tr><tr><td>CAKE</td><td>C</td><td> B</td><td> C</td><td> B</td><td>C</td><td>C</td></tr></tbody></table>


---

# Agent Instructions: Querying This Documentation

If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter:

```
GET https://wiki.patronus.fi/financial-model/asset-rating.md?ask=<question>
```

The question should be specific, self-contained, and written in natural language.
The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.