> For the complete documentation index, see [llms.txt](https://steakhouse.financial/docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://steakhouse.financial/docs/risk-management/collateral/layers-pillars-and-criteria/market-rating-layer-3.md).
# Market Rating (Layer 3)
This is Layer 3 of Steakhouse Financial's Multi-Layer Risk Rating. The Market Rating evaluates the specific lending or investment venue where capital is deployed, assessed across four criteria: Oracle, Liquidity, Price Fluctuation, and LLTV. The last two combine to form Credit Enhancement.
The Market is the DeFi protocol that enables investors with excess capital to generate returns by interacting with it, while using the asset either as collateral (in a collateralized loan) or, more broadly, as the main source of risk.
Each Market is set up by a protocol actor and defined by parameters such as the rate curve, oracle-based pricing methodology, and LLTV. Market volatility can be mitigated through constrained setups, making it necessary to evaluate both its robustness and its suitability as an investment position.
The Market is assessed against four criteria: Oracle, Liquidity, Price Fluctuation, and LLTV, with the last two forming the Credit Enhancement, an additional layer that adjusts the Asset Rating.
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