Issuer (Pillar 1)

The issuer is defined as the organization having the ultimate control over the token issuance and redemption

The issuer can make decisions that will affect: the economical activity represented by the token, the ability to transfer value to the token's holder and the availability of liquidity on primary and secondary markets.

The type of decisions can be related to : economic value (transfer of reserve), business (change of activity), technical implementation (code upgrade, runoff of previous versions), governance (change in the decision-making process, decentralization or recentralization), partnerships (funding, exclusivity).

These decisions can be bounded by : regulatory framework (restricting authorized activity or requiring the segregation of assets reserve), strong governance process.

The Issuer pillar is assessed against three criteria: Social, Decentralization, and Technical. Its rating is the best rating among these three criteria, as each is assessed independently and a high score in any one of them is sufficient to justify a strong rating for the pillar.

1st Pillar	Criteria
Issuer	Social
	Decentralization
	Technical
Pillar Rating	Best Rating of the Criteria

Social

The social criterion refers to the way in which society can regulate the risk of an issuer through identity, regulation, and experience.

Identifying the issuer responsible for managing the asset enables background checks and the enforcement of legal action in case of wrongdoing. This identity can be established either as a company or as the individuals behind a multisignature wallet, and can be complemented with interviews and experience assessments relative to the size of the issuer.

The regulatory framework provides clarity on recourse for action, authorized activities, and the financial and operational requirements that the issuer must meet to manage the assets. The issuer can be regulated, when its activities require a license or agreement, or supervised, where its management quality and practices are frequently monitored by the authorities.

Indicators:

• Identity of the issuer (company or multisignature individuals)

• Experience and legitimacy of the issuer

• Regulatory framework: licenses, agreements, and authorized activities

• Operational and financial requirements enforced by regulatory bodies

Decentralization

The issuer’s ability to influence the core protocol features is assessed through its governance. Decentralized governance ensures that decisions made by a broad and diverse range of stakeholders are taken for the greater good of the protocol. It acts as a safeguard to protect investors’ interests.

Typically, decentralized governance takes the form of a DAO, where governance token holders discuss improvement topics in forums and propose decisions through a formal vote that requires both a voting period and a quorum. It should be noted that governance token holders may differ from actual depositors or users of the protocol, which creates a potential conflict of interest. Nevertheless, new mechanisms such as dual governance and depositor-controlled guardians provide additional protection for depositors.

Indicators:

• Governance token holders distribution

• Roles and responsibilities of the DAO

• Active participation in governance forum

Technical

The technical criterion evaluates how smart contracts embed depositor protections on-chain through immutability, atomic execution, and the mechanisms that govern code changes or interventions.

It considers whether contracts are immutable after deployment, how parameters can be adjusted, and whether discretionary calls are necessary. A robust technical design ensures that safeguards are not dependent on discretionary human action but are enforced automatically through immutable code.

Indicators:

• Immutability or upgradeability of the core contract set

• Ability to modify protocol parameters with economic impact

• Dependence on team members to execute discretionary smart contract calls for routine operations.