Risk Tiers

Risk tiers are used as suggestions for each Cog Pair's risk in order to provide adaptable interest rates and collateralization rates based on the different assets in each pool.

As a permissionless protocol, Cog will never prevent someone from using or deploying a pool. The risk tiers are necessary to provide the correct adjustability for each pool, collateralization ratio, and utilization rates for long-term sustainability.

For now, the Cog team will use the following features to estimate the right risk tier for each Cog Pair, but this is just a suggestion and can be overriden if you feel differently.

Risk	Token Type	Liquidity	Diligence
Stable	Stablecoin to Stablecoin lending	Low	Open Source, Audits
Low	Major Coins such as Ether or USDC	High	Open Source, Audits
Med	Mid Caps	Med	Open Source, Audits
High	Meme Coins, Low Liquidity Coins	Low	Closed Source

The risk tiers will be first determined by the Cog team. All suggestions will still be taken into account in the meantime as the team makes appropriate updates given different market conditions.