Verification
Risk Class
An ordinal class from R1 to R5 that says how much can go wrong. It is assigned by the Risk team from published drivers and reviewed at least annually.
R1 to R5
Each class has a description and an expected-loss band. The badge is a boxed letter and number on a safe-to-hazard scale, never a number out of 100.
| Class | Description | Expected-loss band | Typical assets |
|---|---|---|---|
| Risk Class R1Lower | Established asset, senior claim, verified custody and reporting | Not availableNot provided yet. | Vaulted bullion with daily attestation, prime real estate with senior claim |
| Risk Class R2Moderate | Sound structure with ordinary market and operating risk | Not availableNot provided yet. | Income-producing property, operating renewables, receivables with credit insurance |
| Risk Class R3Elevated | Concentration, development or counterparty risk present | Not availableNot provided yet. | Development projects, single-counterparty concessions, producing mines |
| Risk Class R4High | Material legal, valuation or liquidity uncertainty | Not availableNot provided yet. | Uninsured loan books, assets under legal dispute, illiquid collectibles |
| Risk Class R5Speculative or Restricted | Exploration, early-stage or restricted holding | Not availableNot provided yet. | Exploration licences, early-stage projects, holdings restricted to a jurisdiction |
Score by Risk
Two axes, never one. A high score with a high risk class is an asset that is well documented and still risky.
No listed asset has a published score and Risk Class yet.
Why the two are never blended
A score and a Risk Class said side by side is the only allowed sentence. A single blended label would hide whether a low number came from missing evidence or from a risky asset, and those call for different decisions.
Who sets the class
The Risk team, from the drivers listed on each passport. The Admissions Committee can add a ceiling to the score but cannot change the class; the Risk team can change the class but cannot change the score.
When it changes
At every annual review, and whenever Watchtower confirms a material event in the Ownership, Legal, Custody or Financial categories. Every change is published as a new passport version.