Index Coop 2x BTC Short 1x ETH Ratio

Index Coop leverage tokens, such as BTC2xETH, are designed to track a specific leverage ratio for a targeted market metric, such as the BTCETH price ratio. These tokens employ a range-bound methodology to ensure efficient and predictable performance.

How It Works:

The tokens maintain their target leverage ratio by rebalancing only when the current leverage ratio falls outside a predefined range. Rebalancing occurs if the leverage ratio drops below the minimum threshold or rises above the maximum threshold. This methodology reduces the frequency of rebalances compared to traditional approaches, minimizing tracking error and potential volatility decay over time.

Benefits of the Range-Bound Methodology:

1. Improved Efficiency: Less frequent rebalancing means lower gas costs, reduced volatility decay, and better tracking of the target leverage ratio.

2. Symmetric Rebalancing Thresholds: The minimum leverage ratio is defined as the square of the target leverage ratio divided by the maximum leverage ratio, ensuring balanced responses to equivalent market moves, whether prices increase or decrease.

BTC2xETH will automatically rebalance anytime the current leverage ratio moves outside of the range defined for the product.

Any changes to the methodology or product parameters will be made publicly available and voted on by $INDEX holders before implementation.

Annual Fee: 3.65%

Mint Fee: 0.10%

Redeem Fee: 0.10%

The following risks may apply to this digital asset: full or partial loss of digital assets due to technical hacks, exploits, or failures that may occur at the protocol or smart contract level of a product’s infrastructure; restrictions placed on the digital assets by regulatory authorities in the end users region; loss of digital assets or loss of access to the digital assets due to decisions made by centralized providers of the underlying assets; full or partial loss of digital assets through standard product operations which can be hampered by unexpected market conditions; full or partial loss of digital assets due to changes to underlying product assets made by the originating protocols; full or partial loss of digital assets due to volatility, correlation, value at risk, and contagion risks; underperformance of digital assets due to deviation from intended methodology; full or partial loss of digital assets due to the variability of an assets price; full or partial loss of digital assets due to deviation from the proposed methodology and volatility decay incurred during rebalancing; full or partial loss of digital assets due to liquidation of the position in the event of product malfunctions.