S&P Global Ratings launches risk framework for onchain lending vaults

S&P Global Ratings has formally launched a dedicated risk assessment framework for the fast-growing onchain lending vault market. The new framework covers seven core areas, including credit and liquidity risk, as well as curators, blockchain infrastructure, smart contract protocols, security, and governance. Based on the framework, S&P said it plans to roll out formal credit and risk assessments for major onchain lending vaults in stages. Total value locked in the onchain lending vault sector has surged about 6.6 times to $10 billion from $1.5 billion two years ago, as the need for risk management at institutional-grade standards has gained attention alongside market growth. In DeFi, a vault generally refers to an automated yield-generating account, or deposit pool, in which users deposit assets and preprogrammed smart contract algorithms automatically manage and deploy them.