Points Breakdown
1. Portfolio Allocation
10 points
2. Impermanent Loss Calculations
10 points
3. Scenario Modeling
10 points
4. Written Justification
10 points
5. Oral Presentation
10 points
1. Portfolio Allocation (10 points)
Evaluates: Valid allocation, diversification, logical strategy
| Criteria | Excellent (Full Points) | Good (Partial) | Needs Improvement (Minimal) |
|---|---|---|---|
| Valid Total (5 pts) |
5 pts: Total equals exactly $10,000 | 2 pts: Total within ±$500 of $10,000 | 0 pts: Total more than $500 off |
| Diversification (3 pts) |
3 pts: 2+ strategies, no single strategy >80%, logical spread | 1-2 pts: 2 strategies but one dominates (>80%) OR poor diversification logic | 0 pts: 100% in one strategy |
| Rationale (2 pts) |
2 pts: Allocation clearly matches stated risk tolerance | 1 pt: Some mismatch between risk tolerance and choices | 0 pts: No rationale or major contradictions |
Grading Checklist
- ☐ Does the total equal $10,000? (Auto-check spreadsheet)
- ☐ Are at least 2 strategies used?
- ☐ Is the allocation reasonable given stated risk tolerance?
- ☐ Red flag: 100% yield farm = lacks risk understanding
2. Impermanent Loss Calculations (10 points)
Evaluates: Understanding of IL formula, correct application to LP positions
| Criteria | Excellent (Full Points) | Good (Partial) | Needs Improvement (Minimal) |
|---|---|---|---|
| Formula (4 pts) |
4 pts: Uses correct formula: IL = 2√(r)/(1+r) - 1 | 2 pts: Uses pre-computed table correctly (acceptable) | 0-1 pts: Wrong formula or no IL calculation shown |
| Scenario A (3 pts) |
3 pts: Correctly calculates -2.02% IL for +50% price change | 2 pts: Right approach but arithmetic error | 0-1 pts: Wrong IL value or no calculation |
| Scenario C (3 pts) |
3 pts: Correctly calculates -5.72% IL for -50% price change | 2 pts: Right approach but arithmetic error | 0-1 pts: Wrong IL value or no calculation |
Grading Checklist
- ☐ IL only applied to ETH/USDC LP (not to other strategies)?
- ☐ IL is negative (a loss)?
- ☐ Scenario B has 0% IL (price unchanged)?
- ☐ Scenario A: -2.02% | Scenario C: -5.72%
- ☐ Partial credit: Give 2/3 points if method is correct but numbers are wrong
3. Scenario Modeling (10 points)
Evaluates: Complete calculations for all 3 scenarios, correct APR and price impacts
| Criteria | Excellent (Full Points) | Good (Partial) | Needs Improvement (Minimal) |
|---|---|---|---|
| Completeness (4 pts) |
4 pts: All 3 scenarios fully calculated with total returns | 2 pts: 2 scenarios complete, 1 missing or incomplete | 0-1 pts: Only 1 scenario or no complete calculations |
| APR Applied (3 pts) |
3 pts: Each strategy earns correct APR: LP(30%), Lending(8%), Staking(4%), Farm(100%), USDC(0%) | 1-2 pts: Most APRs correct, 1-2 errors | 0 pts: APR not calculated or mostly wrong |
| Price Impact (3 pts) |
3 pts: ETH positions gain/lose correctly: - LP: ±25% (50/50 split) - Staking: ±50% (100% ETH) - USDC strategies: 0% |
1-2 pts: Right concept but wrong percentages | 0 pts: Price impact not considered or applied incorrectly |
Grading Checklist
- ☐ Are all 3 scenarios (A, B, C) calculated?
- ☐ Does student show APR calculations for each strategy?
- ☐ Common error: Forgetting LP is 50/50 split (only half of ETH's move)
- ☐ Common error: Applying price changes to USDC lending (should be $0)
- ☐ Does net return = APR + IL + price impact?
4. Written Justification (10 points)
Evaluates: Clear reasoning, understanding of trade-offs, scenario analysis
| Criteria | Excellent (Full Points) | Good (Partial) | Needs Improvement (Minimal) |
|---|---|---|---|
| Risk Tolerance (3 pts) |
3 pts: Clearly states conservative/moderate/aggressive and explains how this shaped allocation | 1-2 pts: Risk tolerance mentioned but weak connection to allocation | 0 pts: No discussion of risk tolerance |
| Scenario Analysis (3 pts) |
3 pts: Correctly identifies best/worst scenarios and explains WHY (e.g., "Bull market benefits my 40% ETH exposure") | 1-2 pts: Identifies scenarios but weak or incorrect reasoning | 0 pts: No scenario analysis |
| Trade-offs (4 pts) |
4 pts: Discusses yield vs. safety balance, acknowledges risks taken, shows understanding of IL and protocol risk | 2-3 pts: Mentions some trade-offs but lacks depth or misunderstands risks | 0-1 pts: No discussion of trade-offs or serious misunderstandings |
Grading Checklist
- ☐ Is the writing 2-3 paragraphs (not just bullet points)?
- ☐ Does student explain WHY they chose specific percentages?
- ☐ Does student understand IL is a risk (not just a formula)?
- ☐ Does student acknowledge that high APR = high risk?
- ☐ Look for: "I balanced X vs. Y because..."
5. Oral Presentation (10 points)
Evaluates: Clarity, insights, professionalism (2-minute in-class summary)
| Criteria | Excellent (Full Points) | Good (Partial) | Needs Improvement (Minimal) |
|---|---|---|---|
| Clarity (4 pts) |
4 pts: Clear explanation of allocation and results, stays within 2 minutes, easy to follow | 2-3 pts: Somewhat clear but disorganized or too long/short | 0-1 pts: Confusing, incomplete, or significantly over/under time |
| Insights (4 pts) |
4 pts: Discusses key learnings about DeFi, IL, risk/reward, shows critical thinking | 2-3 pts: Some insights but superficial (e.g., "I learned about IL") | 0-1 pts: No insights or just reads numbers |
| Professionalism (2 pts) |
2 pts: Well-prepared, confident, respectful of time | 1 pt: Somewhat unprepared but adequate | 0 pts: Unprepared, reads directly from worksheet, no effort |
Grading Checklist
- ☐ Does student explain their allocation in simple terms?
- ☐ Does student share at least one "aha moment" or learning?
- ☐ Is the presentation organized (intro → results → takeaway)?
- ☐ Does student answer questions thoughtfully if asked?
- ☐ Bonus consideration: Did student mention real-world DeFi protocols?
Grade Scale
| Points | Grade | Description |
|---|---|---|
| 45-50 | A | Excellent understanding of DeFi concepts and portfolio management |
| 40-44 | A- | Strong work with minor errors in calculations or presentation |
| 35-39 | B+ | Good understanding but missing some key insights or calculations |
| 30-34 | B | Solid work with moderate errors or incomplete analysis |
| 25-29 | C | Basic understanding but significant errors or missing components |
| 0-24 | D/F | Incomplete work or fundamental misunderstandings |
Quick Reference: Common Point Deductions
- -5 pts: Total allocation ≠ $10,000
- -4 pts: IL formula completely wrong or missing
- -4 pts: Only 1 or 2 scenarios calculated (missing scenarios)
- -3 pts: Applying IL to non-LP strategies (shows misunderstanding)
- -3 pts: Price impact not calculated for ETH positions
- -2 pts: Arithmetic errors in multiple calculations
- -2 pts: Allocation has no diversification (100% in one strategy)
- -2 pts: Written justification is just bullet points, not paragraphs
Grading Philosophy
This assignment prioritizes understanding over perfection.
- Give partial credit generously when students show correct reasoning but make arithmetic errors
- Reward risk awareness - A conservative portfolio with solid justification deserves the same grade as an aggressive one
- Value learning insights - Students who can articulate "I learned IL matters less when APR is high" demonstrate mastery
- Don't penalize using the pre-computed IL table - The goal is understanding, not memorizing formulas
- Watch for academic integrity - All students should have different allocations (collaboration on concepts is fine, but portfolios should be unique)
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