Frankencoin

Frankencoin receives a B risk grade (27/100) from Hindenrank, where lower scores indicate lower risk. Moderate risk — innovative oracle-free design eliminates oracle manipulation risk, balanced by auction participation risk during market stress and limited DeFi composability as a CHF-denominated stablecoin. Frankencoin is a decentralized Swiss franc stablecoin (ZCHF) that uses overcollateralized positions without relying on external price oracles, instead using an internal auction mechanism for price discovery and liquidation. Deployed across 8 blockchains with $35M in TVL, its B- grade reflects the novel oracle-free design that eliminates oracle manipulation risk but introduces auction failure risk during market stress.

The key risks identified for Frankencoin are: (1) Frankencoin does not use external price oracles. Instead, it relies on auction participants to correctly price collateral during liquidations. During a market crash, there may not be enough bidders, causing liquidation failures and potential losses for ZCHF holders. (2) ZCHF is denominated in Swiss francs, not US dollars. If you are a USD-based user, you are exposed to CHF/USD exchange rate fluctuations in addition to crypto market risk. (3) New collateral types must be approved by FPS governance token holders. This process could be exploited by actors who accumulate enough governance power to approve risky collateral types.

Frankencoin scores 27/100 across eight risk dimensions: Mechanism Novelty: 6/15, Interaction Severity: 5/20, Oracle Surface: 0/10, Documentation Gaps: 2/10, Track Record: 6/15, Scale Exposure: 3/10, Regulatory Risk: 3/10, Vitality Risk: 2/10. The highest risk area is Mechanism Novelty at 6/15.

Among 25 rated CDP protocols on Hindenrank, Frankencoin ranks #4 by safety (lowest risk score = safest). Its 27/100 risk score and B grade place it among the safer CDP protocols.

Frankencoin scores 6/15 on the Track Record risk dimension, indicating some history of security incidents or exploits. Higher scores reflect more severe or frequent incidents. Review the full risk report for details.