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The centralized exchange probability of loss scoring logic is designed to provide a direct, transparent, and easily interpretable assessment of exchange-level risk. Unlike Project PoL, which must accommodate a wide variety of protocol structures, CEX risk factors are more standardized and therefore allow for a more straightforward scoring model. The scoring system is based on three core risk categories, each assigned a fixed weight reflecting its relative impact on potential user loss.

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Category weighting — security, solvency, and transparency weights

The CEX PoL score is derived from a weighted aggregation of the following categories:
CategoryWeight
Security50%
Solvency30%
Transparency20%
These weights are fixed and publicly disclosed to ensure predictability, comparability, and resistance to manipulation.

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Why these weights — rationale behind the crypto risk metrics

Security carries the highest weight due to the custodial nature of centralized exchanges. A failure in security controls can result in immediate and irreversible user fund losses.This category evaluates:
  • Infrastructure and operational security
  • User account protection mechanisms
  • Preventive and reactive security controls
Given historical loss patterns in the crypto market, security failures represent a significant amount of loss events for centralized exchanges, justifying the dominant weight. This weighting reflects the reality that digital asset security is the first line of defense against custodial loss.

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From raw metrics to a single crypto risk score

Category scoring

Each category produces a normalized category score based on its constituent metrics.

Weighted aggregation

Category scores are combined using the predefined weights (50/30/20) to generate a single calculation score ranging from 0 to 100.

Inversion to PoL

The calculation score is inverted to produce the final Probability of Loss (PoL):
  • 0 PoL → Lowest probability of loss / highest confidence level
  • 100 PoL → Highest probability of loss / lowest confidence level
This inversion ensures intuitive interpretation: lower PoL scores indicate lower risk, while higher PoL scores signal elevated risk exposure.

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Use cases — from institutional risk frameworks to real-time monitoring

The simplicity of the CEX PoL scoring logic makes it particularly suitable for:

Institutional risk frameworks

Integrate CEX PoL into portfolio risk management and counterparty evaluation workflows.

Regulatory oversight

Benchmark exchanges against each other using a standardized, audit-ready methodology.

Real-time monitoring

Track score changes and receive alerts when exchange risk profiles shift.

API integrations

Feed PoL data into automated decision systems and third-party analytical tools.
By maintaining fixed weights and a deterministic calculation model, CORE3 ensures that CEX PoL scores remain stable, auditable, and resistant to subjective influence. This scoring approach supports crypto due diligence workflows where consistency and repeatability are non-negotiable.