HomeCoinsIndex Cooperative (INDEX)An Introduction to DeFi Pulse Index Methodology | by Accelerated Capital |...

An Introduction to DeFi Pulse Index Methodology | by Accelerated Capital | The Index Coop | Sep, 2021

- Advertisement -


Accelerated Capital
An Introduction to DeFi Pulse Index Methodology by Accelerated

The DeFi Pulse Index ($DPI) is a capitalization-weighted index that tracks the performance of decentralized financial (DeFi) assets across Ethereum. It combines the features of an ERC-20 token and a traditional index fund to create a 21st-century digital upgrade to the traditional ETF structure.

As a structured index product, $DPI follows a specific methodology created by DeFi Pulse, the organization that worked with Index Coop to create $DPI, when selecting tokens for inclusion and determining their weights in the index.

The token inclusion criteria considers a wide range of characteristics across four primary categories: descriptive characteristics, supply characteristics, traction characteristics, and user safety characteristics.

  • The token must be available on the Ethereum blockchain.
  • The token must be associated with a decentralized finance protocol or dapp listed on DeFi Pulse.
  • The token must not be considered a security by the corresponding authorities across different jurisdictions.
  • The token must be a bearer instrument. None of the following will be included in the index: wrapped tokens, tokenized derivatives, synthetic assets, tokens that are tied to physical assets, and tokens that represent claims on other tokens.
  • It must be possible to reasonably predict the token’s supply over the next five years.
  • At least 7.5% of the five year supply must be currently circulating.
  • Token must have reasonable and consistent DeFi liquidity on Ethereum.
  • The token’s economics must not have locking, minting or other patterns that would significantly disadvantage passive holders.
  • The project must be widely considered to be building a useful protocol or product.
  • Projects focused on competitive trading/holding, having Ponzi characteristics, or projects that exist primarily for entertainment, will not be included.
  • The project’s protocol must have significant usage.
  • The protocol or product must have been launched at least 180 days before being able to qualify to be included in the index.
  • The protocol or project must not be insolvent.
  • Security professionals must have reviewed the protocol to determine that security best practices have been followed to maintain user assets safe under different circumstances.
  • Alternatively, the protocol must have been operating long enough to create a consensus about its safety in the decentralized finance community.
  • In the event of a safety incident, the team must have responded promptly and addressed the incident responsibly in the aftermath, providing users of the protocol with a reliable solution and the decentralized finance community with adequate documentation to provide transparency about the incident.
  • The selected tokens must have sufficient liquidity across a variety of trading platforms.

The DeFi Pulse Index methodology weights tokens in the index according to their market cap based on circulating supply. Index constituents are capped at a 25% max allocation to avoid over-concentration. Any excess weight above 25% that would have been allocated to the token is redistributed to the remaining components of the DeFi Pulse Index on a weighted basis.

$DPI is maintained in two phases: a determination phase where tokens are added/deleted, circulating supply is assessed, and weightings are outlined based on the above methodology, and a reconstitution phase where the index composition changes from the determination phase are implemented. The determination phase typically occurs during the third week of the month, and reconstitution is enacted on the first working day of the following month.



Source link

- Advertisement -
Mr Bitcointehttps://www.bitcointe.com/
“Fact You Need To Know About Cryptocurrency - The first Bitcoin purchase was for pizza.” ― Mohsin Jameel
462FansLike
76FollowersFollow
4,567FollowersFollow
5,261FollowersFollow
1,501FollowersFollow
2,230SubscribersSubscribe

Most Popular

bitcoin
Bitcoin (BTC) $ 65,192.00
ethereum
Ethereum (ETH) $ 4,212.83
tether
Tether (USDT) $ 1.00
bitcoin-cash
Bitcoin Cash (BCH) $ 645.86
litecoin
Litecoin (LTC) $ 207.66
eos
EOS (EOS) $ 4.84
okb
OKB (OKB) $ 24.84
tezos
Tezos (XTZ) $ 7.00
leo-token
LEO Token (LEO) $ 3.09
cardano
Cardano (ADA) $ 2.23
monero
Monero (XMR) $ 262.92
stellar
Stellar (XLM) $ 0.392061
chainlink
Chainlink (LINK) $ 27.56
huobi-token
Huobi Token (HT) $ 9.19
tron
TRON (TRX) $ 0.103161
usd-coin
USD Coin (USDC) $ 1.00
dash
Dash (DASH) $ 202.74
neo
NEO (NEO) $ 45.34
iota
IOTA (MIOTA) $ 1.29
nem
NEM (XEM) $ 0.17835
zcash
Zcash (ZEC) $ 150.37
maker
Maker (MKR) $ 2,618.35
paxos-standard
Pax Dollar (USDP) $ 1.00
ethereum-classic
Ethereum Classic (ETC) $ 56.24
vechain
VeChain (VET) $ 0.124552
true-usd
TrueUSD (TUSD) $ 1.01
ftx-token
FTX Token (FTT) $ 61.71
kucoin-shares
KuCoin Token (KCS) $ 14.70
waves
Waves (WAVES) $ 29.43