Clearstar Standard
General Due Diligence
6 assessment areas that apply to every opportunity we evaluate - assets, protocols, and blockchains alike.
Governance and Access Control
Understanding who truly controls the protocol and under what conditions they can act. We assess the decentralization of power and the safeguards against malicious upgrades or internal attacks. Any unclear admin rights trigger immediate disqualification.
Contract Ownership
Analysis of contract ownership and admin key structure.
Multisig Configuration
Verification of multisig signers and thresholds.
Timelock Duration
Evaluating the duration for protocol upgrades to pass.
Emergency Powers
Assessment of emergency powers and their triggers.
Governance Model
Comparing on-chain vs. off-chain governance dynamics.
Smart Contract Security
The foundation of protocol safety. We look beyond basic audits to evaluate true code maturity, complexity risks, and external dependencies that could introduce vulnerabilities. These checks also apply to asset-specific smart contracts.
Audit History
Review of audit history and the firm's reputation.
Critical Findings
Status of critical findings and their remediation.
Production Time
Measuring time in production without incidents.
Code Complexity
Evaluating code complexity and attack surfaces.
External Dependencies
Analysis of external dependencies and composability risks.
Oracle Security
Price feeds are a common vector for manipulation. We analyze how protocols source external data and their resilience against oracle manipulation attacks. Protocol dependency chains often reveal hidden oracle risks.
Price Feed Source
Evaluation of price feed sources and methodology.
Oracle Setup
Comparing single oracle vs. multi-oracle setups.
Staleness Thresholds
Review of staleness thresholds and fallback logic.
Manipulation Resistance
Assessing manipulation resistance mechanisms.
Circuit Breakers
Implementation of circuit breakers and deviation limits.
On-Chain Financial Audit
Verifying the real financial health of the protocol by confirming assets on-chain, ensuring adequate backing, and checking the segregation of funds. Commingled assets or untraceable fund flows are automatic disqualifiers.
TVL Verification
Verification of Total Value Locked against on-chain data.
Reserve Backing
Analysis of reserve backing and collateral ratios.
Fund Flow Analysis
Tracing fund flows and checking wallet separation.
Fund Segregation
Segregation between treasury and user funds.
Historical Solvency
Verification of the protocol's historical solvency.
Team Reputation and Transparency
Technology is built by humans. We assess the background, track record, and structural setup of the core team to gauge their reliability and competence during stress. Evasive communication from teams is a critical red flag.
Team Background
Reviewing founder and core team backgrounds.
Track Record
Assessing the team's track record in previous projects.
Incident Response
Review of historical incident response handling.
Communication
Evaluating communication quality during stress periods.
Legal Structure
Analysis of legal entity structure and jurisdiction.
Economic Design
A protocol must be economically sustainable. We evaluate whether yields are driven by real revenue, how incentives are structured, and the mechanics for handling bad debt. See our fee structure analysis for protocol-specific economics.
Yield Source
Differentiating between real revenue and mere emissions.
Incentive Sustainability
Evaluating token incentive sustainability over time.
Fee Structure
Analysis of fee structure and protocol revenue generation.
Liquidation Mechanics
Assessing liquidation mechanics and bad debt handling.
Economic Attack Vectors
Thorough analysis of potential economic attack vectors.
Deep-dive into tokens, stablecoins, LSTs, and LRTs evaluation frameworks →
Lending platforms, DEXs, yield vaults, and derivatives protocols analysis →
L1s, L2s, and infrastructure layer security and decentralization analysis →
Critical warning signs that immediately disqualify any opportunity →
Back to Main Due Diligence
Return to the central hub to see how these 6 areas form the foundation of our entire assessment framework.
View Main DD Framework