Introducing: the Index Coop CoinDesk ETH Trend Index ($cdETI)
Automate exposure to ETH with the Index Coop CoinDesk ETH Trend Index ($cdETI)
October 24, 2023
The Index Coop is delighted to announce the launch of the Index Coop CoinDesk ETH Trend Index (cdETI), an automated strategy token powered by CoinDesk Indices’ Ether Trend Indicator (ETI).
“The Ether Trend Indicator is designed to detect the presence, direction, and strength of trends in the price of ether. We built it to drive client-developed outcome-oriented ETH strategies that help deliver a smoother ride,” said Andy Baehr, CFA, Managing Director at CoinDesk Indices. "We are excited to collaborate with Index Coop for cdETI, the first on-chain ETI-driven product.”
By tokenising ETI, cdETI aims to capitalise on ETH’s price momentum without the need for constant market monitoring and manual trading.
In this article, you’ll learn:
- The potential benefits of holding cdETI
- What a trend indicator is
- How CoinDesk Indices’ Ether Trend Indicator (ETI) works
- How cdETI utilises CoinDesk Indices' Ether Trend Indicator (ETI) to allocate to ETH and/or USDC
What are the potential benefits of holding cdETI?
Individuals are notoriously bad at timing the market. cdETI offers holders an automated way to gain exposure to ETH and ETH price momentum; the token aims to capture gains during bull phases and preserve capital during bear phases.
By holding cdETI, users can benefit from an automated and data-driven strategy that takes the guesswork out of maintaining exposure to ETH and ETH price momentum.
Backtest data shows cdETI potentially outperforming ETH over the last two years.
And, perhaps most interesting for certain types of buyers, cdETI aims to reduce volatility for holders compared to holding ETH.
What is a trend indicator?
A trend indicator is a set of dynamic signals designed to convey the presence, direction and strength of momentum in the price of a digital asset.
How does the CoinDesk Indices’ Ether Trend Indicator (ETI) work?
CoinDesk Indices’ Ether Trend Indicator (ETI) provides a snapshot of Ethereum's price momentum on a daily basis. It compares short-term and long-term price averages to determine whether the price is in an uptrend, downtrend, or staying steady. The ETI uses price data from the past 180 days to calculate these averages. It then breaks down this analysis into four pairs of short-term and long-term averages, comparing them to identify the price trend.
The result is a daily value of -1, -0.5, 0, 0.5, or 1. A value of 1 indicates a significant uptrend, -1 indicates a significant downtrend, and values in between show varying degrees of upward or downward trends, with 0 indicating no clear trend. This simplifies complex price data into an easy-to-understand indicator, helping individuals gauge Ethereum's price momentum at a glance.
How cdETI utilises CoinDesk Indices’ Ether Trend Indicator (ETI)
cdETI, an ERC20 token accessible to anyone (in compliance with our Terms of Service*), enables holders to gain exposure to ETH price momentum with guidance from CoinDesk Indices’ Ether Trend Indicator for the first time.
*cdETI is not available to Restricted Persons, as defined in our Terms of Service, which includes US persons.
cdETI allocates to USDC and/or ETH according to values from ETI per the following methodology:
- When ETI is 1, indicating a significant uptrend, cdETI allocates 100% to ETH
- When ETI is 0.5, 0 or -0.5, indicating an uptrend, neutral or downtrend, respectively, cdETI allocates 50% to ETH and 50% to USDC
- When ETI is -1, indicating a significant downtrend, cdETI allocated 100% to USDC
For a more detailed explanation of cdETI’s methodology, including backtest results, please read the forum post. You can also review CoinDesk Indices' Ether Trend Indicator methodology here.
Fees
The Index Coop CoinDesk ETH Trend Index will have an annual fee of 1.50% and a 0.10% issuance and redemption fee.
How to Buy / Sell
cdETI is available through Flash Mint via the Index Coop App. Flash Mint facilitates cost-effective trades by minting new units from cdETI’s underlying product components of USDC and WETH. Swap won’t be available via DEX as liquidity will not be provided.
cdETI is not offered to Restricted Persons, including US Persons, as defined in our Terms of Service. Please also see our list of Tokens Restricted For Restricted Persons.
More Resources
cdETI product page
The Index Coop’s forum post
Index Protocol explainer
ConDesk Indices’ Ether Trend Indicator dashboard
cdETI dashboard on Dune
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