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MVI

Metaverse Index

The Metaverse Index (MVI) is designed to capture the trend of entertainment, social activity and business moving to take place in virtual economies, powered by NFTs and blockchain technology.

About

Overview

The Metaverse Index (MVI) is designed to capture the trend of entertainment, social activity and business moving to take place in virtual economies, powered by NFTs and blockchain technology. The MVI uses a combination of the square root of market cap and DEX liquidity to arrive at the final index weights.

Methodology

Specification

The Metaverse Index methodology weights tokens in the index according to their market cap based on circulating supply and available liquidity.  The index weight is calculated using a combination of square root market cap and liquidity weighting to arrive at the final index weights. The index weighting can be calculated as

TW = (0.75)*RMCW + (0.25)*LW

where,

TW = token weight in the $MVI

RMCW = square root of market cap weighted allocation

LW = liquidity weighted allocation

Token Inclusion Criteria:

Selection of the $MVI tokens would be based on the following basic criteria:

The Metaverse 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

  • The token must be available on the Ethereum blockchain.
  • The protocol must be in one of the following token categories:  Non Fungible Tokens, Entertainment, Virtual Reality, Augmented Reality and Music. 
  • The token must not be considered a security by the corresponding authorities across different jurisdictions.
  • The token must be a bearer instrument. None of the following will be included in the index: Wrapped tokens, Tokenized derivatives, Synthetic assets, Tokens that are tied to physical assets, Tokens that represent claims on other tokens.

Token’s Supply Characteristics

  • Total market cap must be over $30m. 
  • Token must have reasonable and consistent DEX liquidity on Ethereum.

Project’s Traction Characteristics

  • The Protocol must have at least 3 months history of operation and its token must have at least 3 months of price and liquidity history.
  • The project’s protocol must have significant usage.
  • The protocol or project must not be insolvent.

Protocol’s User Safety Characteristics

  • An independent security audit should have been performed on the protocol and results reviewed by the product methodologist. In the case that no audit has been performed, the methodologist will apply subjective judgment of the protocol based on assessment of the criteria above and communications with the team.
  • In the event of a security issue the methodologist should work with the project team to understand the issue and any effects to the $MVI holdings. The team would be expected to provide users of the protocol with a reliable solution and adequate documentation to ensure transparency about the incident.
  • Tokens will not be staked at the launch of the index. This is subject to change as liquidity increases and it becomes possible to safely generate yield through staking.

Implementation

The Metaverse Index is implemented on Set Protocol on the Ethereum mainnet

Maintenance

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 Metaverse 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.

Fees

Streaming fee: 0.95%

Mint fee: 0%

Redeem fee: 0%

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.

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