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Imperium DeFi Index

The crypto scene is roaming with new ideas and innovation. The space is evergrowing and getting better and better each day, even in bear markets.

And Imperium is participating in this growth by solving the problems of crypto investing, offering security, ownership and permanent exposure to the top cryptocurrencies, all in one easy-to-use investment tool.

Among the multitude of crypto projects, the ones in decentralized finance see the most interest from the market. And this is only natural, as money is an essential matter in anyone’s life.

Also, developers in this sector are building continuously new protocols in order to offer competitive alternatives to the traditional financial services.

Developing further its range of investment products, Imperium set the course for the launch of a series of niche crypto indices based on specific project categories. And seeing the evident potential of DeFi, the company decided that it should be the first industry to begin with.

Therefore, we are introducing our latest index, the “Imperium DeFi Index”!

“Imperium DeFi Index” is a sectoral crypto index consisted of a selection of the top cryptocurrencies in the DeFi industry.

It is determined and managed based on a specific methodology (as explained below), being weighted based on the values of each token’s market cap and liquidity over a certain period

It tracks projects of different scales in order to obtain a ballance between risk and potential reward, taking advantage of the dynamics from each level of this sector.

The index is composed of 25 DeFi protocols, divided into several categories, relative to their market capitalization:

  • Stars — Mcap above $500mil — 10 projects, places 1 to 10
  • Rising Stars — Mcap between $200mil and $500mil — 3 projects, places 11 to 13
  • Reliable — Mcap between $100mil and $200mil — 3 projects, places 14 to 16
  • Promising — Mcap between $50mil and $100mil — 3 projects, places 17 to 19
  • Emerging — Mcap below $50mil — 6 projects, places 20 to 25

While the projects in the first 4 categories are exclusively picked by Imperium’s team, for the Emerging Category, the community will choose its constituents, out of the projects that qualify.

This will be done through a “Community Contest” that we will explain in details in the next week’s article.

The share percentage of a specific token in the Index is calculated based on several factors, according to the Index’s methodology.

Inclusion Criteria

  • The token must be available on the Ethereum, Polygon or Tron blockchains.
  • The token must be listed on CoinGecko and CoinMarketCap with accurate information and be part of one of the following categories:

– DeFi 2.0
– DeFi Protocol
– Derivatives
– Launchpad
– Lending & Borrowing
– Oracle
– Staking & Farming
– Vaults
– Yield Aggregator
– Yield Farming

  • The protocol must have a history of at least 6 months of operation and its token must have at least 6 months of price and liquidity historical data.
  • ‍The token must have a total market capitalization of over $5,000,000.
  • Token’s average daily volume must be above:

– $100,000 — for projects that are active for less than 6 months
– $75,000 — for projects that are active from 6 months to 1 year
– $50,000 — for vetted projects

  • The token must have reasonable and consistent DEX liquidity on Ethereum, Polygon or Tron blockchains, on at least 2 DEXs.
  • The token must be listed on at least 2 major CEXs (in Top 50).
  • The project must have an active and engaged community (Twitter/Telegram/Discord).
  • The project must have undergone a smart contract audit that is publicly accesible. Alternatively, the protocol must have been operating enough time to create a consensus about its safety in the crypto community.

Asset Weight Calculation

The weight of each asset inside the Index will be calculated using a combination of two weight scores, one based on the square root of the token’s market capitalization, and the other on it’s average liquidity in the past 6 months.

We take liquidity into consideration as we believe it’s an important factor for the health of a DeFi project, or of any cryptocurrency in general.

The formula is as follows:

TW = X% x RMCW + Y% x LW

TW — token weight in the Index

RMCW — Square Root of Market Cap Weight score

It represents the root of the 180 day market cap average (of the respective token) / Σ (sum) of root of the 180 day market cap average (of all 25 tokens)

LW — Liquidity Weight score

It represents the 180 day liquidity (% of tokens in circulation) average / Σ (sum) of the 180 day liquidity average (of all 25 tokens)

The percentages of each weight score (X, Y) in the formula are yet to be established.

Index Maintenance

The Index will be rebalanced monthly according to the TW formula and redetermined when needed, also on a monthly basis.

Tokens from the Index can be staked to safely generate yield, where possible.

Also, an Index Manager will constantly keep in touch with each project in order to assess that they are on point with delivering upon their roadmaps (development, listing strategy, community growth etc.) and that no security issues arrise.

Should any issue arise that would jeopardize the allocated funds, Imperium reserves the right to immediately remove any token from the Index.

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