Cryptocurrency attributes
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Summary:
Over the last year Decentralized Finance has exploded, with many new financial tools built on Ethereum. DEFI Index Pie is the most diversified DeFi index on the market, aiming to provide the broadest possible exposure to this rapidly growing industry.
To achieve this we included both large and small market cap projects, with a focus on market leaders and innovators. The pie is a 70/30 weighted balance of our DLP and DSP indices.
Objective:
As a community we pooled our knowledge to build an index containing the highest-quality projects at the top of their game, featuring the best large and small cap projects in the ecosystem. A wide range of financial services are represented, including decentralized stablecoins (Maker), derivatives (Synthetix), price oracles (ChainLink) and layer two scaling solutions (LoopRing).
DeFi users can easily gain access to a diverse spectrum of DeFi projects with DEFI++, able to zap in at the touch of a button and just one transaction.
PieDAO really does make DeFi simple.
Methodology:
Allocation weight is determined by adjusted market cap, with larger assets receiving a greater percentage share. This enables maximum future growth without bottlenecks. Without this design smaller project’s lack of liquidity can limit the size a pie can grow to.
Why diversify? Our backtesting shows that the more diversified an index, the better it performs. Not only that wide diversification ensures minimal risk exposure, meaning DEFI++ is the safest DeFi index too.
Following the same process as all our indices, DEFI++’s allocation is the result of weeks of community research and discussion, ultimately being voted into existence as a 70/30 balanced allocation of our Large & Small Caps indices.
Operation:
DEFI++ is a tokenized representation of a basket of relevant assets, with the underlying tokens safely stored in our treasury. The index is constructed using Balancer smart pools meaning that it constantly rebalances and reacts to market changes in real-time. There is no withdrawal fee, and a highly competitive 0.7% streaming fee rewards DOUGH holders for their governance of the system.
We also provide a DEFI++ staking contract where users can provide liquidity in return for a steady stream of DOUGH.
Performance:
Above you can see how the DEFI++ index performed relative to its underlying assets and Ether. Harry Markowitz was right, diversification really is the only free lunch in finance.
