Cryptocurrency Market Index

Objective

The CMI Index is a digital asset index designed to track performance of the crypto crypto market. The index is equally weighted between three assets: WBTC, ETH, USDC. The CMI Index allows you to get the profitability of the all crypto market just HODLing only one token.

Token’s Descriptive Characteristics

The CMI Index consists of three assets:

1. Wrapped Bitcoin (WBTC) is the first ERC20 token backed 1:1 with Bitcoin.

2. Ethereum is the community-run technology powering the cryptocurrency, ether (ETH) and thousands of decentralized applications.

3. USDC is issued by regulated financial institutions, backed by fully reserved assets, redeemable on a 1:1 basis for US dollars, and governed by Centre, a membership-based consortium that sets technical, policy and financial standards for stablecoins.

Index Calculation

Formula

The index consists of three assets proportional to each other. Target allocation of the index is always kept as follows: 33.33% WBTC, 33.33% ETH, 33.33% USDC. When there is a deviation of any token weight from the index target allocation to a critical value, the index will be rebalanced. Learn more about rebalancing in the Reconstitution Phase

TW = (⅓)*IV

where,

TW – token weight in the $CMI

IV – Index Value in USD

Index Maintenance

The index is maintained monthly in two phases:

Determination Phase

The determination phase takes place:

1. during the fourth week of each month

2. when the actual weight of one of the assets in the index is deviated by 10% from its target allocation.

It is the phase when the changes needed and next reconstitution are determined.

Allocation Determination: The index allocation is recalculated taking into account changes of market prices.

Reconstitution Phase

Following publication of the determination phase outcome, the index composition will change to the target weights:

1. during the first week of the following month.

2. on the next or same day when 10% deviation of any asset from target allocation happened.

Issuance of CMI token

Any client can issue new CMI Index tokens using the DeFi TokenSets protocol. To do this, he needs to initially have tokens that are included in the index and deposit them as a pledge into a smart contract to receive CMI. This allows to reduce the spreads between the fair value of the CMI token and its value on DEX platforms.

Redemption of CMI token

Any CMI token holder can use the decentralized TokenSets protocol to receive the tokens that are included in the index, in exchange for the CMI token.