Why Index Coop Matters For Mass Adoption Of Crypto

Why Index Coop Matters For Mass Adoption Of Crypto
  • Index products(ETF & index funds) can be the entry point for the new investors in DeFi market.
  • Index Coop is currently digging into this field in the best and right way.

Land Of Opportunity

In the stock market, there are 3 main ways to invest: Direct investment, Index fund & ETF.

I’ll refer index product as structured product which covers index fund and ETF.

Advantages of Index Product

  1. You don’t have to pick winner. There are tons of stocks in the world. Picking the winner from these piles of stocks is unlikely to succeed even for professional ones. For retail investors, it’s impossible to invest enormous time and money for analyzing stocks while doing their main job.
  2. You can do thesis based investment. For example, If I think AI sector would be booming in future, Rather then choosing one company, It’s better to invest in AI-related ETF. With index products, I can invest by my knowledge or thesis.
  3. Risk Aversion Sector based ETSs are based on multiple assets of corresponding sector, so it is automatically diversified. Also, there are passive ETFs which follow S&P 500 or other index with relatively low volatility.

Opportunity In Crptocurrency Market

  1. There’s not enough Index products in DeFi market Index products account about 18% of the total stock market, while Index products account for less than 1% of DeFi industry. In addition, among Index products, only few operates in decentralized form.
  2. Key to Mass Adoption Mass Adoption is the magic word & ultimate goal while we work in crypto-related products. Currently, there are many barriers for ordinary investors to enter the cryptocurrency market.
    • As cryptocurrencies doesn’t need any process like IPO, number of tokens are much greater than number of stocks and scams are frequent in cryptocurrency market.
    • As there are less liquidity than stock market, volatility is very high.
    • Cryptocurrency investment requires quite a lot of research relative to stock market.I think these barriers can be knocked down, if there’s easy, reliable and efficient investment vehicle for normal investors to jump in. Index products can be the key.
Businessman Looking For Investment Opportunity Standing On Growth Graph.  Profit Stock Market. Business Concept. Vector Flat Cartoon Illustration  Flat Design. Royalty Free Cliparts, Vectors, And Stock Illustration. Image  96413466.

Index Coop

Index Coop is DAO which builds index products to offer easier way for people to enter cryptocurrency investment.

Index Coop aims to be Decentralized BlackRock or Vanguard in the cryptocurrency market.

DAO > Traditional Company Structure

There exist investment firms that offer crypto index products in traditional centralized ways. However, it’s quite inefficient when it comes to the blockchain-based cryptocurrency industry.

DAO, which enables a mission-based digital community leveraging blockchain tech, works way more transparent, efficient, accessible than the traditional company structure. For example, anyone can see how DAO’s treasury is being used. If you want to join DAO, you can do it by just joining the discord server. Anyone with governance tokens can exercise their vote in the direction of DAO.

Unique Features of Index Coop

Because Index Coop works as DAO, it has some unique features relative to a normal investment managers.

  • Members of Index Coop DAO propose and vote on what products to be created and launched.
  • $INDEX, governance token of Index Coop DAO can be used to stake, farmed in liquidity pool for additional earnings.

Index Coop Community


Launched Products

Currently, Index Coop offers DPI, MVI, BED, DATA, FLI tokens. Among this products, DPI, MBI, DATA are sector based ETFs, BED is passive index product, and FLI is leverage ETF.

DPI(DeFi Pulse Index)

Introducing The DeFi Pulse Index - DeFi Pulse : r/ethtrader

DPI is an asset that tracks the performance of DeFi industry which is built on 18 underlying DeFi project tokens. Each asset is weighted based on the circulating supply, but upper cap is 25%.

If you believe in DeFi, but can’t pick winner, DPI is the best option.

MVI(Metaverse Index)

https://cdn.substack.com/image/fetch/w_1100,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F3c1a1a21-5cea-4302-8cc3-e8452a074d9e_200x200.png

MVI tracks Metaverse industry which is based on Metaverse, NFT related project tokens.

If you believe in Metaverse, MVI is the best option.

DATA(Data Economy Index)

https://cdn.substack.com/image/fetch/w_1100,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F428cf371-0380-4898-9945-2068274ced4e_400x400.jpeg

Data is similar to DPI, MVI, but difference is that it tracks the data industry.

FLI(Flexible Leverage Index)

https://cdn.substack.com/image/fetch/w_1100,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F6c58090a-310d-42e2-90cf-a01a950520a9_200x200.png

For FLI, there are BTC 2x FLI & ETH 2x FLI product.

For example, ETH 2x FLI is Ethereum 2x leverage product which allows investors to invest in leverage in safer and efficient way.

Currently, to invest in leverage, investors should put collateral in centralized exchange, bear with high volatility and threat of margin call. But, with FLI, Index Coop does all these complicated works instead of investors.

BED(Bankless Bed Index)

https://cdn.substack.com/image/fetch/w_1100,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Ffef51b71-78be-4bfa-aca6-f09ea5f194b0_250x250.png

BED is a passive index product that has Bitcoin, Ethereum, DPI token in 1:1:1 ratio. BED is perfect option for investors who don’t want high volatility but still wants exposure to cryptocurrency.

Advantages Of Index Coop Products

Investing in Index Coop products are way more efficient than individuals mimicking diversified investment in own way. For example, there are few problems when you try to mimic the DPI token.

  • Buying 18 different tokens will cost you lots of gas fee.
  • Tracking all 18 total token’s price and portfolio rebalancing based on the projects’ performance is time consuming and gas-inefficient.
  • Lots of transaction records for rebalancing would work unfavorably in terms of tax.

Wrap Up

Index Coop’s current attempt to make access to cryptocurrency investment easy and efficient can have a significant impact on cryptocurrency investments becoming as popular as the stock market, which makes Index Coop’s attempt is also very important in terms of the overall crypto industry.


References

Index Coop DAO Raises $2.25M and Nears $500M in Managed Assets

Introducing the Index Cooperative

Index Coop: The Crypto BlackRock ???

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