Stablecoins
Synnax Risk Framework for Crypto Stablecoins
The Synnax Crypto is an AI/ML-driven system that leverages real-time zero-knowledge attestations to produce forward-looking risk metrics for stablecoins. By integrating Accountable’s Protocol Verifiable Attestation data with market and macroeconomic signals, Synnax generates an unbiased, composite risk score to assess stablecoin solvency and reliability in real time.
Risk Framework Structure
Data inputs
Synnax continuously integrates:
Accountable’s Verifiable Attestations (reserves, custodians, collateral breakdown)
Public attestations, audit reports, self disclosures and blockchain data
Market Data (liquidity, trading volume, volatility)
Macroeconomic Indicators (interest rates, FX rates, regulatory changes)
AI-Powered Predictions
Synnax’s ML-powered forecast is based upon four key risk drivers:
Collateral Value (30-day price trajectory of backing assets)
Custodian Impairment Risk (probability of credit events affecting reserves)
Stablecoin Supply (changes in circulating supply)
Liquidity Risk (ability to handle mass redemptions)
Ehnanced Risk Metrics
To improve robustness, Synnax incorporates:
Liquidity Coverage Ratio (LCR) - Measures the Liquidity Risk Weighted Assets (LRWA) available to cover redemptions under stress:
LCR Outputs:
LCR = 100% → Sufficient liquidity coverage
LCR < 100% → Risk of liquidity shortage during redemption
Concentration Risk Score (CRS) - Evaluates overexposure to single custodians or assets
CRS Outputs:
Score close to 0 → Diversified reserves
Score close to 1→ High concentration risk
Reserves At Risk (RAR)
To produce a Reserves At Risk score, a 95% confidence level Relative Value at Risk is calculated based on reserves assets price predictions made by the Synnax Lab.
RAR Output:
RAR score close to 0 → lower risk
RAR score close to 1 → risk of reserves deficit to cover the supply
Composite Risk Score Calculation
Synnax combines VaR, LCR, and Concentration Risk into a single 0-100% metric:
Where weights (w₁, w₂, w₃) are dynamically adjusted to maximise accuracy based on model back testing.
Synnax Risk Score result interpretation:
< 60% → Low risk (collateralized, liquid, low wallet/custodian risk)
60-85% → Moderate risk (potential vulnerabilities)
≥ 85% → High risk (elevated chance of depeg)
Synnax Risk Tiers
Based on the Synnax Risk Score result, Synnax Risk Tiers will be assigned according to the following criteria:
AAA
0 - 11
AA
11 - 21
A
21 - 31
BBB
31 - 41
BB
41 - 51
B
> 61
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