Can on-chain data help protect against ICP downside?

We’ve been testing whether our on-chain dataset can be used not only to describe what happened on ICP, but to extract signals with potential forward-looking value.

One of the strongest results so far comes from a proprietary downside-risk model.

We tested it as a simple long-only spot implementation: the strategy remains exposed to ICP under normal conditions and moves out of the asset when the model identifies an elevated downside-risk regime.

No shorting. No leverage.

Historical backtest — Jan 2025 to Aug 2026

Risk-managed ICP: +118%
ICP buy & hold: −76%

Maximum drawdown:

−32% vs −84%

The model also outperformed in 2026:

+44% vs −16%

See chart

What matters to us is not simply the backtested return.

The result suggests that the structure of on-chain activity can contain information about subsequent downside risk— and that sufficiently detailed blockchain data can potentially be transformed into systematic risk-management and research signals.

The signal methodology and construction are proprietary.

The historical backtest uses a one-day execution lag, assumes 10 bps per exposure change, and credits no return while out of ICP. It is a research backtest, not live performance.

We provide on-chain data, research and custom analytics for professional and institutional use cases: https://icterminal.com/custom-inquires