X-Margin Credit Evaluation Methodology

X-Margin provides real-time privacy preserving portfolio risk metrics for lenders, and has built a Credit Evaluation Methodology for trading firms. This document outlines the X-Margin Credit Evaluation Methodology, the main categories, and factors that compose them. X-Margin relies on these underlying factors, as they have high correlation to a trading firm's creditworthiness.

The evaluation is split into three main parts:

• Due Diligence (200 out of 1000): Evaluation of a borrower's operational and corporate risk

• Financials (200 out of 1000): Evaluation of a borrower's reported financial data

• Risk Monitoring (600 out of 1000): Real-time evaluation of a borrower's leverage and market risk

Through real-time credit evaluation, X-Margin infrastructure supports data-driven lending for any pool of capital. Applications include the transparent operation of credit vehicles in DeFi, and the securitization of institutional loans for digital asset trading.

With the release of this V2 Methodology, X-Margin is introducing improvements following the feedback provided by active users and partners. The Credit Evaluation Methodology will evolve over time, as X-Margin evaluates increasing amounts of aggregate data and develops new methods of privately evaluating risks.