cdETI, an automated strategy token powered by CoinDesk Indices’ Ether Trend Indicator (ETI), is designed to take advantage of ETH’s price momentum, without the need for constant market monitoring and manual trading
dETI allocates to a mix of ETH and/or USDC based on the ETI. When the indicator shows a significant uptrend, cdETI is allocated 100% to ETH. When there is a significant downtrend, cdETI is allocated to 100% USDC. If there is no significant trend, the product will be allocated equally to USDC and ETH.
As Andy Baehr, CFA and Managing Director at CoinDesk Indices put it, "We built ETI to drive ETH strategies that help deliver a smoother ride. We are excited to collaborate with Index Coop for cdETI, the first on-chain ETI-driven product.”
Backtest data shows cdETI potentially outperforming ETH over the last two years.
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.
cdETI allocates to USDC and/or ETH according to values from ETI as per this methodology:
For more information as to why Index Coop DAO chose this methodology, please read the forum post, noting 4.2.3 'Adaptation of the methodology.' You can also review CoinDesk Indices' Ether Trend Indicator methodology here.
Rebalancing will be performed in an automated fashion as per the preset parameters when the indicator value changes according to the methodology. Though the exact rebalance cadence is not necessarily predictable, periods of high volatility are expected to trigger more rebalancing. CoinDesk Indices is responsible for publishing and maintaining the Ether Trend Indicator and Index Coop is responsible for maintaining the automated token. Any material changes to the methodology or the token will be subject to an $INDEX governance vote.
The Index Coop CoinDesk ETH Trend Index will have an annual fee of 1.50% and 0.10% issuance and redemption fee.
Risks: 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 volatility of underlying tokens.
Disclaimer: cdETI is a very high risk product unsuitable for many crypto users. Past performance is no guarantee of future returns.The performance of cdETI is dependent on CoinDesk's ETH Trend Indicator, cdETI’s methodology and tracking and various other factors. Please seek professional advice before buying cdETI. cdETI may deliver zero or negative returns compared to holding ETH or stablecoins. Buyers of cdETI expose themselves to a number of risks - including but not limited to smart contract, indicator, stablecoin, wrapping, ETH price, protocol exploit or hack, volatility, regulatory restrictions, market liquidity and structure, methodology, value at and contagion - which they should only do after careful research and assessment of their financial goals, preferably with an advisor.
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