# Kaizen Scoring System

The Kaizen Scoring System is the core intelligence engine that evaluates Web3 projects and provides actionable risk insights. Our proprietary algorithm combines multiple data sources and analytical methods to generate comprehensive security scores.

#### Score Range and Categories

**Primary Score Range**

* **Score Scale**: 0-100 (integer values)
* **Scoring Direction**: Higher scores indicate lower risk
* **Update Frequency**: Real-time with 30-second intervals for active monitoring

**Score Categories**

| Score Range | Category      | Risk Level     | Description                                     |
| ----------- | ------------- | -------------- | ----------------------------------------------- |
| 90-100      | **Excellent** | Very Low Risk  | Highly secure projects with robust fundamentals |
| 75-89       | **Good**      | Low Risk       | Solid projects with minor concerns              |
| 60-74       | **Moderate**  | Medium Risk    | Projects with notable risks requiring caution   |
| 40-59       | **Poor**      | High Risk      | Projects with significant red flags             |
| 20-39       | **Very Poor** | Very High Risk | Projects with severe security concerns          |
| 0-19        | **Critical**  | Extreme Risk   | Likely scams, rug pulls, or honeypots           |

**Sub-Score Components**

Each primary score is composed of weighted sub-scores:

```
Primary Score = (
  Liquidity Score × 0.25 +
  Code Quality Score × 0.20 +
  Social Intelligence Score × 0.15 +
  Ownership Score × 0.15 +
  Developer Activity Score × 0.10 +
  Market Behavior Score × 0.10 +
  Security Audit Score × 0.05
)
```

#### Risk Classification

**Classification Methodology**

**Green Zone (75-100)**

* Verified contract source code
* Locked or burned liquidity (>6 months)
* Active and transparent development team
* No major red flags detected
* Strong community engagement

**Yellow Zone (40-74)**

* Some verification missing
* Moderate liquidity concerns
* Limited development transparency
* Minor technical issues detected
* Mixed social sentiment

**Red Zone (0-39)**

* Unverified or suspicious code
* Unlocked liquidity or low liquidity
* Anonymous or inactive developers
* Multiple red flags present
* Negative social indicators

**Risk Factors Hierarchy**

**Critical Risk Factors** (Immediate red flags)

* Honeypot contracts detected
* Unlimited minting functions
* Hidden backdoors in code
* Suspicious fund movements
* Known scammer associations

**Major Risk Factors**

* Unverified smart contracts
* Low liquidity (<$10k)
* Anonymous development team
* Rapid token distribution
* Suspicious social activity

**Minor Risk Factors**

* Recent project launch (<7 days)
* Limited social presence
* Low trading volume
* Basic tokenomics
* Minimal documentation

#### Confidence Levels

**Confidence Scoring Methodology**

Confidence levels indicate the reliability of our scoring based on available data and analysis depth.

| Confidence    | Range   | Description                                       | Data Requirements                                        |
| ------------- | ------- | ------------------------------------------------- | -------------------------------------------------------- |
| **Very High** | 95-100% | Comprehensive analysis with multiple data sources | 48+ hours of monitoring, verified contracts, social data |
| **High**      | 85-94%  | Solid analysis with good data coverage            | 24+ hours of monitoring, most data sources available     |
| **Medium**    | 70-84%  | Adequate analysis with some limitations           | 12+ hours of monitoring, basic data available            |
| **Low**       | 50-69%  | Limited analysis due to data constraints          | <12 hours of monitoring, minimal data                    |
| **Very Low**  | <50%    | Insufficient data for reliable scoring            | New project, limited information                         |

**Confidence Calculation Formula**

```
Confidence = (
  Data_Completeness × 0.30 +
  Analysis_Depth × 0.25 +
  Source_Reliability × 0.20 +
  Time_Coverage × 0.15 +
  Verification_Status × 0.10
) × 100
```

#### Score Interpretation Guidelines

**For End Users**

**Score 90-100: Proceed with Confidence**

* Generally safe for investment consideration
* Continue monitoring for any changes
* Review specific risk factors for complete picture

**Score 75-89: Proceed with Caution**

* Acceptable risk level for experienced users
* Monitor closely for developments
* Consider smaller position sizes

**Score 60-74: Exercise Extreme Caution**

* Suitable only for risk-tolerant investors
* Requires continuous monitoring
* Consider waiting for improvements

**Score 40-59: High Risk - Not Recommended**

* Significant concerns identified
* Only for speculative trading
* Use minimal capital allocation

**Score 0-39: Avoid - Extreme Risk**

* Multiple critical issues detected
* High probability of loss
* Not recommended under any circumstances

**For Developers and Auditors**

**Technical Indicators to Monitor:**

* Contract verification status
* Ownership concentration ratios
* Liquidity lock mechanisms
* Code complexity metrics
* External dependency risks

**Social Indicators to Track:**

* Community engagement levels
* Developer communication frequency
* Social sentiment trends
* Influencer involvement patterns
* Manipulation detection signals