Matrix ETF announced last Thursday, October 21, through its Twitter account, the official launch of the first $MDI index product of Matrix ETF.
“MatrixETF is the next generation of decentralized ETF platform that supports cross-chains. The MatrixETF Index product to be launched is a crypto index ETF, the goal is to track high qualified tokens in the crypto and blockchain market. This fund is based on the asset of a basket of tokens, which users do not need to buy on exchanges, they can make the investment of an asset in another asset (industry, hotspot) only through a simple placement, instead of losing the high yield potential of the crypto market. Therefore, the Matrix Index product is one of the simplest ways for investors to participate in the financing of the cryptocurrency market”, he said through an article published on the Medium platform.
According to the company, the Matrix DeFi Index (MDI) provides investors with a self-contained portfolio and DeFi investment exposure that is based on decentralized governance. You can track the trend and development of the entire DeFi crypto market by maintaining MDI, as well as spreading the risks and making better profits by placing multiple assets.
Constitution of MDI
According to the company, DeFi is one of the most popular and fastest developing industries in the crypto market. Coupled with various major projects in the DeFi protocol such as DEX 、 Oracles 、 Lending 、 Assets 、 Emerging derivatives in the segmentation market, DeFi scale generates bigger and bigger, DeFi protocol locked position has skyrocketed to $90.69 billion, which It is up to 3.7% of the full scale of the crypto market.
“As we can see, DeFi has become a new trend and direction, while DeFi has different protocols, processes, assets and tool sets, how to take advantage of DeFi wealth opportunities is a question for investors. In this case we promote the Matrix DeFi Index (MDI)”, he added.
The company explained that they have referred to CoinGecko’s DeFi category and CoinMarketCap when we produce the Matrix DeFI Index, and we have filtered the top 20 DeFi assets on Ethereum according to DeFi Pulse’s DeFi locked position data.
Furthermore, he indicated that under a thorough consideration of comparisons such as the market limits of DeFi protocols, project development situations and the status in the crypto market, etc., we have chosen 10 protocols to constitute MDI, such as UNI 、 LINK 、 AAVE 、 GRT 、 MKR 、 COMP 、 DYDX 、 SUSHI 、 YFI 、 CRV, etc., to track popular DeFi assets on Ethereum in the crypto market.
MDI weight ratios
The company detailed that MDI is made up of popular DeFi projects in the crypto market such as UNI 、 LINK 、 AAVE 、 GRT 、 MKR 、 COMP 、 DYDX 、 SUSHI 、 YFI 、 CRV, etc.
“We use a method to calculate the weight ratios of the MDI component tokens: fundamental weight and market capitalization weight, we calculate the allocation and weight ratio of each basic asset by 30% fundamental weight + 70% weight of market capitalization”, he commented.
Fundamental weighting
According to the MatrixETF Index Methodology article, there are 5 Fundamental Weighting scoring standards:
• Economic model of tokens
• Development and potential of the project
• Protocol security
• Token trading risk
• Community base
Market capitalization weighting
In his view, the market capitalization is the project’s circulating market value, based on authorized data from CoinGecko and Coinmarketcap, we calculate the circulating market value by capturing the prices and circulations of the tokens. There are 3 market-accepted methods for weighting the project’s market capitalization: market capitalization weighting, square root market capitalization weighting, and equal weights weighting.
Similarly, he explained that MDI uses simple market capitalization weighting to calculate component token weights.
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Final weight ratio
He also commented that they calculate the final MDI component token weight by 70% market capitalization weight + 30% fundamental weight.
MDI parameter
• Token name: Matrix DeFi Index
• Token symbol: MDI
• Contract: 0x52148693901fb27cb4d27b2b0eb5e2820873e245
• Decimals: 18
• Etherscan: Information
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