$DPI struggles in June while $BTC and $ETH remain range-bound

Year-to-date through the end of June, $DPI is up +138.0%, $BTC is up +21.2%, and $ETH is up +208.6%

There was a wide dispersion of returns across $BTC, $ETH, and $DPI in June as the market continued to consolidate following the May rout.

Bitcoin was the best performer of the month (-5.8%), but remains the worst-performing asset of the three during the second quarter (-33.1%). $ETH declined -15.8% in June, but managed to maintain positive performance for Q2 (+19.0%). $DPI fell -32.7% and is down -33.1% over the past three months.

* Inception on September 14, 2020. Cumulative performance. ** Standard deviation of daily returns since inception.

On-chain Analytics

Total addresses holding $DPI remain on the rise as evidenced by the following Dune Analytics chart:

Addresses holding less than 10 units of $DPI have been the main demographic driving this trend. $DPI is a low cost and efficient tool for getting exposure to the largest names in the DeFi sector, hence its popularity among smaller holders.

Portfolio Analytics

Volatility has continued to impact market dynamics resulting in another uptick in correlations among the major crypto assets. The net upside capture ratio declined relative to $BTC and $ETH this month, likely reflecting investors preference to de-risk into crypto market leaders and stablecoins. As a reminder, a positive net capture ratio means an asset is capturing more upside performance vs. downside performance relative to another asset.

Data over the period since the inception of DPI.

Turning to performance, $CREAM was the only constituent to post positive returns (+22.2%) for the month of June. $SNX had the toughest time in June as its price continued to see downward pressure following a wave of liquidations in the first half of the month.

* Contribution measures the degree of each individual token’s contribution to the performance of DPI over a period. This is an estimate. At this point in time, we are not able to account for the constant changes in the weight of the underlying tokens in the portfolio. As such, contribution is calculated based on the beginning portfolio weights post monthly rebalance, assuming they stay static during the month.

Constituent Highlights

$CREAM: $CREAM had the best month of all of the constituents in the index, buoyed by the strong pace of updates coming from the team. $CREAM was successfully whitelisted on Bancor early in the month, enabling single-sided staking for the token on the platform. In addition, the app received a face-lift from the pplpleasr team that allows users to more easily search and sort assets, view TVL and Total Reserve for each market, chart historical supply and borrow APYs, and more.

Expansions onto Layer 2s also appear to be a focus following announcements of a launch on Arbitrum and Polygon. For the latter, users will be able to supply and borrow USDC, USDT, DAI, WMATIC, WETH, WBTC, LINK, SUSHI, CRV, QUICK.

A final notable highlight: Coinbase Custody recently announced it is supporting $CREAM.

$COMP: On June 28th, Compound Labs announced Compound Treasury, a platform designed for non-crypto native businesses and financial institutions to access the DeFi lending protocol. The Compound Treasury will offer a fixed 4.00% APR account to clients with 24-hour liquidity, low minimums, and a simplistic interface that abstracts away the complexity of crypto.

While $COMP traded broadly in line with the rest of the DeFi market throughout June, this announcement prompted a rally toward the end of the month. It’s an exciting opportunity for the industry since it will give traditional companies access to the core benefits of DeFi.

Rebalancing Summary

$UNI was trimmed this month after hitting the asset weighting cap once again. All other assets were purchased with the proceeds.

Introducing $BADGER: The biggest change to the allocation for July is the introduction of a 0.63% position in $BADGER, the native governance token of Badger DAO. Badger DAO’s goal is to create an ecosystem of DeFi products built on top of Bitcoin. The $BADGER token allows community members to take part in governance and earn staking rewards. It has a maximum supply of 21 million tokens, like $BTC.

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