3.4 Interpreting the Output

3.4 Interpreting the Output

Detailed Report Components

Predicted Growth Percentages

• Quantitative Forecasts:

  • Present expected yield percentages for each identified liquidity pool.

  • Include metrics like annual percentage yield (APY) and annual percentage rate (APR).

• Statistical Confidence:

  • Provide confidence scores or prediction intervals.

  • Indicate the reliability of the forecasts.

Risk Classification

• Risk Assessment Categories:

  • Classify pools into risk tiers (e.g., low risk, medium risk, high volatility).

  • Consider factors such as liquidity depth, smart contract audits, and market sentiment.

• Explanation of Risk Factors:

  • Detail the specific elements contributing to each pool's risk level.

Example Insights

• Pool A:

  • Predicted Growth: 12% over the next 14 days.

  • Risk Level: Low risk.

  • Rationale: Stable historical performance, high liquidity, positive market sentiment.

• Pool B:

  • Predicted Growth: 25% over the next 14 days.

  • Risk Level: High volatility.

  • Rationale: Recent surge in activity, potential regulatory changes, lower liquidity.

Graphical Representations

Trajectory Charts of Yield Increases

• Historical vs. Predicted Yields:

  • Plot past yield performance alongside forecasted yields.

  • Visualize trends and potential inflection points.

• Comparative Analysis Between Pools:

  • Overlay multiple pools' performance for direct comparison.

  • Highlight divergences and convergences in yield trajectories.

Additional Visual Aids

• Volatility Indicators:

  • Include Bollinger Bands or volatility cones to depict expected price ranges.

• Correlation Matrices:

  • Show the relationships between different assets or pools.

• Scenario Simulations:

  • Display potential outcomes under different market conditions (e.g., bullish vs. bearish scenarios).