The Science of Yield Reliability V2

The DeFiStar.io Yield Reliability Index V2 combines historical win-rate analysis with advanced predictive machine learning. Unlike V1 which used simple historical averages, V2 employs trend-weighted scoring, momentum analysis, and confidence-gated predictions for significantly improved accuracy.

What's New in Prediction Engine V2

• Trend-Weighted Scoring: Recent performance (last 7 days) is weighted at 65% while historical data contributes 35%. This captures regime changes faster.
• Momentum Signals: We detect whether reliability is trending up or down by comparing recent vs prior 7-day periods. Rising momentum boosts predictions; falling momentum reduces them.
• Utilisation Leading Indicators: Rising pool utilisation often precedes rate increases. We incorporate this forward-looking signal into predictions.
• Dynamic Tolerance Bands: Instead of fixed ±10%, tolerance now scales with each pool's volatility. Stable pools get tighter bands; volatile pools get wider ones.
• Confidence Gating: Predictions are only made when confidence exceeds 55%, reducing noise from uncertain signals.
• Pool Type Segmentation: Governance-linked pools (Maker/Spark) use different parameters than high-utilisation or standard pools.

How Confidence Score is Calculated

• Sample Size (25 pts): More historical data increases confidence.
• Low Volatility (25 pts): Stable APY patterns are more predictable.
• Trend Stability (25 pts): When recent ≈ historical, the pool is consistent.
• Historical MAE (25 pts): Lower past prediction errors mean higher confidence.

Understanding the Metrics

• Win Rate %: Trend-weighted probability of beating the benchmark.
• Truth Score: Our prediction accuracy for this specific pool.
• Predictability: Confidence level based on error magnitude (100% - MAE).
• Confidence: Multi-factor score determining if we should make predictions.
• Momentum: Week-over-week APY trend direction and magnitude.

The Reliability Tiers

• Legendary (95%+ Score): Statistically maintained yields through all market conditions. Prime candidates for passive income.
• Robust (80-94% Score): Excellent performers with occasional dips. Suitable for medium-term strategies.
• Volatile (<80% Score): High variance pools requiring active management and timing.

How to Use This Data

Look for pools with high Win Rate, strong Confidence (>70%), and positive or neutral Momentum. Compare Recent 7d vs Historical reliability—if recent is significantly lower, the pool may be entering a downturn. Low Volatility combined with high Truth Score offers the highest mathematical certainty.