Index Coop: DeFi requires index assets, and Index Coop is the DAO for index casting

Time:2021-12-24 Source: 1254 views DeFi Copy share

We are looking for the hot spots of DeFi in the future. We might as well compare the traditional financial system to find out what DeFi is still lacking. They will basically be reconstructed once on the blockchain using Crypto.

However, it is difficult to predict the order of occurrence of hot spots, because there are many uncertain external factors and technical reasons.

At the asset level of DeFi, for professional traders, derivatives are still extremely underdeveloped, and for the larger number of ordinary investors who do not understand complex operations, index assets are very few.

In traditional financial markets, index assets are an important asset allocation tool, although the first index fund for individuals was only launched in 1976.

Samuelson, winner of the Nobel Prize in Economics, even believes that index funds are inventions as important as wheels and letters.

Buffett has also repeatedly recommended ordinary investors to buy S&P 500 index funds instead of bothering to select individual stocks, and the returns of the latter often do not outperform the former.

Of course, this kind of assets that passively share the average return of the market is only suitable for long-term bullish markets.

In the defi field, although index assets have long existed (for example, Synthetix launched the synthetic asset Sidefi in 2019-the ERC20 token that tracks a basket of DeFi tokens), it is far from an explosion.

There are many reasons. One reason that cannot be ignored is that although the DeFi market is growing rapidly, it was still a new species at the time. Investors in the traditional currency circle did not understand DeFi, and investors who could understand DeFi had a lot of investment opportunities at that time. .

Moreover, even in the entire cryptocurrency field, BTC's increase has been tens of times, not to mention altcoins, and index assets are relatively unimportant.

But now the DeFi market has changed. The wealth effect of the early bull market has faded, and a large amount of funds have poured into the traditional financial market. These factors all point to passive diversification of investment-index assets.

This part of the holders who invest in cryptocurrencies for the purpose of optimizing asset allocation will coexist with scientists who are studying the project in depth.

InDEX Coop is a platform for minting index tokens, and the project is governed by DAO (members use INDEX tokens to vote to determine the index composition).

Index Coop now has 5 types of index assets.

DeFi Pulse Index (DPI) is a capital-weighted index used to track the performance of DeFi assets in the entire market, and prices track those head items.

Metaverse Index (MVI) is to capture the economic activity trend of Metaverse, and it tracks the data on Ethereum.

Flexible Leverage Indices (FLI) is a leveraged index, but there is no risk of liquidation. To put it bluntly, it is a leveraged token. For example, ETH2x-FLI is 2 times leveraged ETH.

Rest easy holding (BED) is an index that packs weights such as BTC, ETH, and DPI.

Data Economy Index (DATA) is a basket of 7 tokens, including Filecoin, Graph, Basic Attention Token, Livepeer, Ocean Protocol, Numeraire and Chainlink, a digital ecosystem for collecting, storing and selling data.

The creation of these index assets provides novices with a new type of asset that can easily access various assets. The advantage is to minimize costs and troubles.

Of course, these assets can also be minted by centralized exchanges, or other DeFi protocols can also be minted, but the imagination of Index Coop lies in DAO governance.

Everyone can put forward their index or structured product ideas, and then the community will vote with INDEX, and the product will be launched after approval.

The advantage of this is that the forged assets can better reflect market demand, similar to the difference between a market economy and a planned economy.

A number of index asset suppliers will surely emerge in the future, and DAO is the moat of Index Coop.

Index Coop recently completed $2.25 million in financing, which was jointly led by Sequoia Capital India, Blockchain Ventures and White Star Capital. Index Coop previously completed a $7.75 million financing, led by Galaxy Digital and 1kx. At present, the total financing amount has reached 10 million U.S. dollars.

DeFi is undoubtedly an emerging market that is still growing, but we have to distinguish two completely different groups in the market because they have different product needs.

Some of them are scientists and speculators who are brave enough to try new experiments. They need to experience products in the deep water area of finance (such as perpetual options) in DeFi. They are driving the imagination of DeFi.

There are also some investors who just pursue better returns than savings. They are optimistic about the prospects of the DeFi market. However, out of risk considerations, they pursue diversified investments and low rates, then index assets are very suitable for them.

The Index Coop is currently the best relevant platform for DAO governance.

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