Validation & limitations

1. What LSRI measures

LSRI publishes a Structural Stress Index (0–100) and four regime states (Normal → Critical) for a fixed basket of major digital assets. The read summarizes structural stress and cross-asset coherence (including mean correlation ρ) for monitoring and internal risk process — not for trade timing.

• Daily structural snapshot (UTC cadence) and regime labels per asset.
• Transition log with persistence rules (see Track record).
• Desk workflow: Today, Systemic, Stress, Proof; Committee snapshot for governance.
• Conditional scenarios A (base), B (escalation), C (systemic contagion when ρ threshold is met).

2. What LSRI does not measure

• Price targets, buy/sell signals, or guaranteed forward returns.
• Full-market coverage (DeFi, alt universe, or chain-level liquidity in one score).
• Replacement for your compliance, model validation, or investment mandate.
• “AI prediction” or sentiment alpha — the product is regime and structural context only.

3. Regimes & transitions

Regime bands discretize the 0–100 scale for operational reading. Confirmed transitions follow documented persistence (typically 2-day rule on the public log). A regime change is a structural state change, not an automatic trading instruction.

False positives can occur around sharp but short-lived dislocations; use Proof, crisis filters, and Committee context before acting. Past transitions are documented ex post — they do not imply future timing.

4. Fixed basket & history depth

Production monitoring focuses on six majors (BTC, ETH, BNB, SOL, DOGE, XRP). Institutional tiers may extend visibility; the public site and Free tier intentionally limit depth.

Live API history generally starts around mid-2019 per asset (Twelve Data). Pre-2019 stress episodes are illustrated on Backtests, not as live archive rows.

5. Crisis windows (illustrative)

Named windows help due diligence; they are case studies on archived transitions, not performance marketing.

• FTX 2022 (BTC) — stress and ρ behaviour in the archive.
• COVID 2020 (BTC) — liquidity shock window.
• Due diligence pack — live stats and ρ presets on load.

6. Statistical validation

Walk-forward and out-of-sample material lives on Audit & OOS. Sharpe, drawdown, and capital curves are robustness indicators — not promises of future performance. Full replication of proprietary weights requires subscriber / NDA review.

7. Operational limits

• Publication cadence: daily UTC structural refresh unless your tier states otherwise.
• API cold start may return 502 — retry; health endpoint documented on Due diligence.
• Public signal logs are signed (SHA-256) where stated; verify archives for audit trails.