Introducing the Coinshares Gold & Cryptoasset Index (CGI)

Introducing the Coinshares Gold & Cryptoasset Index (CGI)

In March 2020, the CoinShares Group launched the CoinShares Gold and Cryptoassets Index (CGCI), the first ever EU Benchmark Regulations approved index that tracks gold and cryptoassets in a risk-controlled manner.

Today, in collaboration with Coinshares, Index Coop is bringing an ERC-20 version to Ethereum with the CGI.

At the Index Coop, we build products that make crypto easy to access.

The Coinshares Gold & Cryptoasset Index Lite, CGI, is the next step in that mission. CGI gives holders passive access to the theme of ‘hard’ or ‘sound’ money, with crossover between the digital (BTC, ETH) and physical (Gold) worlds.

For millennia, investors have sought exposure to physically scarce resources as stores of value. Beginning with Bitcoin, cryptoassets have endeavored to digitally replicate the scarcity characteristics of their physical counterparts.

But scarcity is not the only dimension that investors in these assets consider. Anyone who’s monitored cryptoassets broadly is aware of the volatility associated with this nascent asset class.

CGI’s proprietary methodology seeks to dampen the volatility associated with cryptoassets by rotating between them and gold. This concept, known as “volatility harvesting,” is the crux behind CGI.

By pairing gold and cryptoassets in a way that accounts for their risk contribution, CGI delivers a risk and return profile that is superior to holding gold or cryptoassets alone.

Performance of $1,000 invested in CGCI (Backtest) — Coinshares

What’s Inside?

CGI begins with (a) forming an equally weighted basket of bitcoin and ether and (b) combining it with gold using weighted-risk contribution as a rebalancing mechanism.

CGCI Relative Weights Over Time — Coinshares

CGI is adapted from CGCI’s initial formulation in order to accommodate itself on Ethereum via a Set token. This adaptation includes using the Wrapped Digital Gold token (wDGLD) from Coinshares and Blockchain.com. The initial allocation for the Set is:

• Gold (wDGLD) - 50.98%

• Crypto (wETH, wBTC) - 49.02%

How to Buy

The CGI is an ERC-20 asset that is now available on IndexCoop.com, TokenSets, and Uniswap (via CGI/wETH pool). Soon, it will be integrated with a number of other platforms and exchanges. As with all Index Coop products, the CGI will emphasize composability and will allow anyone to participate in activities such as; arbitrage, issuance, redemption, and liquidity provision.For those that want to mint the Set directly, the issuance process can be started by depositing assets into a smart contract on TokenSets — where the user receives units of the index directly to their address. One can also provide liquidity for the token on Uniswap, and — eventually — could use the CGI in activities such as lending.