Beneat

Layer 4: Validation #

Before any zone reaches you, it passes through our validation layer to ensure statistical rigor and quality.

Validation Process #

Data Integrity Check

1/4

Verify all underlying data is accurate and from confirmed transactions.

Pattern Analysis

2/4

Check if the clustering pattern matches historically profitable setups.

Risk Assessment

3/4

Evaluate potential downside scenarios and red flags.

Confidence Scoring

4/4

Calculate statistical confidence level for the zone.

Validation Metrics #

Confidence Score #

The confidence score represents how likely the zone is to be actionable based on historical pattern matching:

Confidence = f(
  historical_similarity,
  actor_quality,
  market_conditions,
  token_liquidity,
  timing_factors
)

Validation Status #

Status	Description
`validated`	Passed all checks, high confidence
`early`	Promising but needs more data
`monitoring`	Being watched, not yet actionable
`review`	Potential issues detected

Red Flag Detection #

Our system automatically flags potential issues:

Low Liquidity: Token may be difficult to exit
Concentrated Holdings: Few wallets control supply
Recent Contract: Token deployed very recently
Unusual Patterns: Activity doesn't match normal trading

Flagged Zones

Zones with red flags are not automatically rejected but are clearly marked. Use extra caution.

Backtesting #

Every zone type is continuously backtested:

interface BacktestResult {
  zoneType: string;
  period: "30d" | "90d" | "1y";
  metrics: {
    totalZones: number;
    profitableZones: number;
    hitRate: number;
    avgReturn: number;
    maxDrawdown: number;
    sharpeRatio: number;
  };
}

Quality Assurance #

We maintain zone quality through:

Continuous Monitoring: Real-time tracking of zone outcomes
Algorithm Updates: Regular improvements based on performance data
Threshold Adjustments: Dynamic tuning of zone criteria
False Positive Analysis: Investigation of failed zones