The DeFi Pulse Index (DPI) is a capitalization-weighted index that tracks the performance of some of the largest protocols in the decentralized finance (DeFi) space. The index is weighted based on the value of each token’s circulating supply. The DeFi Pulse Index aims to track projects in DeFi that have significant usage and show a commitment to ongoing maintenance and development.
The DeFi Pulse Index methodology weights tokens in the index according to their market cap based on circulating supply. Index constituents are capped at a 25% max allocation to avoid over-concentration. Any excess weight above 25% that would have been allocated to the token is redistributed to the remaining components of the DeFi Pulse Index on a proportional basis.
Token Inclusion Criteria:
The DeFi Pulse Index considers a wide range of characteristics that can be placed in four dimensions. Two dimensions are used to evaluate the token’s characteristics, one dimension is used to assess the project’s characteristics, and one is used to evaluate the protocol’s characteristics. The inclusion criteria are the basis to select what tokens will be included in the index.
Token’s Descriptive Characteristics
Token’s Supply Characteristics
It must be possible to reasonably predict the token’s supply over the next five years. At least 7.5% of the five year supply must be currently circulating. The token’s economics must not have locking, minting or other patterns that would significantly disadvantage passive holders.
Project’s Traction Characteristics
Protocol’s User Safety Characteristics
The DeFi Pulse Index is implemented using TokenSets on Ethereum mainnet
The index is maintained quarterly (in January, April, July, and October) in two phases:
Determination Phase. The determination phase takes place during the third week of the rebalancing month. It is the phase when the changes needed for the next reconstitution are determined.
Circulating Supply Determination: The DeFi Pulse Index currently references CoinGecko’s circulating supply number. The Circulating Supply is also determined during the final week of the quarter and published before the reconstitution. Additions and deletions: The tokens being added and deleted from the index calculation are determined during the last week of the quarter and published before the reconstitution.
Reconstitution Phase. The index components are adjusted, added and deleted as per the instructions published after the end of the determination phase. New index weights, additions and deletions are incorporated into the index during the monthly reconstitution, which will take place on the first business day of the month. As assets tracked by the index grow, the reconstitution window will expand to more than one day to lower the reconstitution’s market impact.
Streaming fee: 0.95%
Mint fee: 0%
Redeem fee: 0%
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.