Economic Score
The Economic Score evaluates an operator's financial health, behavior patterns, and allocation risk. It contributes 35% to the overall Risk Score and is built from five components that together reveal whether an operator is built on solid economic foundations.
How It's Calculated
Economic Score = (Delegation Concentration x 0.35)
+ (Commission Stability x 0.20)
+ (TVS Growth x 0.15)
+ (Utilization x 0.15)
+ (AVS Concentration x 0.15)
| Component | Weight | What It Measures |
|---|---|---|
| Delegation Concentration | 35% | How diversified the delegator base is |
| Commission Stability | 20% | How frequently commission rates change |
| TVS Growth | 15% | 30-day trend in Total Value Secured |
| Utilization | 15% | How much allocation capacity is being used |
| AVS Concentration | 15% | How diversified allocations are across AVSs |
Delegation Concentration (35%)
The biggest component of the Economic Score. It measures how spread out an operator's delegation is across different delegators, using a metric called the Herfindahl-Hirschman Index (HHI).
In simple terms: if one delegator controls most of the stake, that's a concentration risk. If that delegator withdraws, the operator could lose most of their TVS overnight.
| Delegation Pattern | HHI | Score |
|---|---|---|
| Many small delegators | 0.00 | 100 |
| Well diversified | 0.10 | 90 |
| Moderately concentrated | 0.25 | 75 |
| Highly concentrated | 0.50 | 50 |
| Single delegator | 1.00 | 0 |
What this means for you: An operator with a score of 90+ has a broad delegation base --- no single delegator can destabilize them by withdrawing. A score below 50 means a handful of wallets control most of the stake, which is a meaningful risk factor.
Commission Stability (20%)
Tracks how often an operator changes their commission rates over the past 90 days. Frequent changes are penalized because they create unpredictability for delegators.
| Changes in 90 Days | Score |
|---|---|
| 0 | 100 |
| 1 | 90 |
| 3 | 70 |
| 5 | 50 |
| 10 or more | 0 |
Why this matters: Operators who change commissions frequently could be:
- Operationally unstable
- Running "bait and switch" tactics (low rates to attract delegators, then raising them)
- Responding to market pressure in unpredictable ways
A stable commission rate signals an operator who has settled on a sustainable business model.
TVS Growth (15%)
Measures the 30-day growth trend in Total Value Secured. A growing TVS indicates market confidence; a declining TVS may signal delegators leaving due to concerns.
| Growth Rate | Score |
|---|---|
| +100% or more | 100 |
| +50% | 75 |
| 0% (flat) | 50 |
| -50% | 25 |
| -100% or more | 0 |
New operators with no previous TVS data default to a score of 70, giving them the benefit of the doubt while they establish a track record.
What this means for you: A declining TVS isn't automatically a red flag --- it could reflect normal market movements. But combined with other weak signals (high concentration, frequent commission changes), it paints a concerning picture.
Utilization (15%)
Measures how much of the operator's total capacity is allocated to AVSs. Operators allocate their stake through a magnitude system, and high utilization means they have less buffer for new opportunities or unexpected events.
| Utilization Rate | Score | Interpretation |
|---|---|---|
| 0--70% | 100 | Healthy buffer capacity |
| 80% | 67 | Limited flexibility |
| 90% | 33 | Very high allocation |
| 100% | 0 | Fully allocated, max risk |
No penalty applies until utilization exceeds 70%. After that, the score drops steeply.
What this means for you: An operator at 90%+ utilization has almost all their stake committed to AVS allocations. This means:
- Less room to take on new AVS commitments
- Higher overall exposure if any AVS triggers slashing
- Limited ability to adjust allocations in response to market changes
Learn more about the allocation system in Allocations & Magnitude.
AVS Concentration (15%)
Similar to delegation concentration, but applied to the operator's allocations across AVSs. An operator who puts all their allocation into a single AVS faces correlated risk --- if that AVS has problems, the impact is concentrated rather than spread out.
| AVS Allocation Pattern | HHI | Score |
|---|---|---|
| Spread across many AVSs | 0.00 | 100 |
| Well diversified | 0.10 | 90 |
| Moderately concentrated | 0.25 | 75 |
| Highly concentrated | 0.50 | 50 |
| Single AVS | 1.00 | 0 |
What this means for you: Diversification across AVSs is a form of risk management. If one AVS has a slashing event, an operator spread across many AVSs will be less impacted than one concentrated in just a few.
Example
An operator with:
- Delegation HHI = 0.15 --- Concentration Score = 85
- 2 commission changes --- Commission Score = 80
- +25% TVS growth --- Growth Score = 75
- 65% utilization --- Utilization Score = 100
- AVS HHI = 0.30 --- AVS Concentration Score = 70
Economic Score = (85 x 0.35) + (80 x 0.20) + (75 x 0.15) + (100 x 0.15) + (70 x 0.15)
= 29.75 + 16.0 + 11.25 + 15.0 + 10.5
= 82.5
A strong Economic Score, driven primarily by good delegation diversification and healthy utilization levels.