Indexed Finance Defi Coin Review: Development of Passive Portfolio Management

About Indexed Finance

The live Indexed Finance price today is $6.63 USD with a 24-hour trading volume of $41,868.08 USD. Indexed Finance is up 4.96% in the last 24 hours. The current CoinMarketCap ranking is #1103, with a live market cap of $5,668,560 USD. It has a circulating supply of 854,801 NDX coins and the max. supply is not available.

Indexed Finance is a project focused on the development of passive portfolio management strategies for the Ethereum network. Indexed Finance is managed by the holders of its governance token NDX, which is used to vote on proposals for protocol updates and high level index management such as the definition of market sectors and the creation of new management strategies.

A new-to-crypto-investing option, providing 20% exposure to both BTC and ETH, with the remainder spread across large-mid cap DeFi protocols and smaller growth shots via the DEFI5, CC10 and DEGEN indices.

Quick Fact About Indexed Finance

Index Pools

Indexed Finance first product developed by Indexed Finance is a set of capitalization-weighted index pools designed to replicate the behavior of index funds, which historically have returned better and more consistent returns than actively managed funds on the stock market.

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Index pools simplify asset management on Ethereum the way that index funds do for the stock market: by creating a single asset which represents ownership in a diverse portfolio that tracks the market sector the index represents. Each index pool has an ERC20 index token which anyone can mint by providing the underlying assets in the pool, burn to claim the underlying assets, or swap with exchanges to easily manage their exposure to specific markets.

Indexed Finance pools regularly rebalance their underlying assets in order to better represent the market sectors they track. Portfolio targets are set using on-chain data from Uniswap and pre-set rules defined in smart contracts. As with index funds, the only roles for humans in managing index pools are the initial determination of weighting and asset selection rules, the definition of market sectors and the classification of assets into those sectors. These roles are carried out by NDX governance, which has mandatory time-locks for all governance decisions.

NDX Token Distribution

NDX is the governance token for Indexed. The initial supply of 10,000,000 NDX will be distributed as follows:

• 30% will be made available to the NDX treasury over the course of 9 months, beginning March 1, 2021.
• 25% will be distributed through liquidity mining to users who stake CC10/DEFI5 index tokens or their Uniswap Ether pair LP tokens (ending March 8th 2021).
• 20% will go to the founders, investors and future team members, subject to vesting periods.
• 14% will be distributed via the treasury in a manner to be determined by governance.
• 6% will be distributed through liquidity mining to users who stake index tokens or Uniswap Ether pair LP tokens as part of the Sigma program.
• 5% will be used to reward keepers who update the Uniswap oracle and trigger periodic updates on the pool controller.

Terminology

• Weight – The proportion of a pool’s total value which a token represents.
• Denormalized Weight – The denormalized weight value. Solidity does not have good handling for fixed point numbers, so the contracts uses denormalized values to represent token weights.
• Target Weight – The weight that a pool’s controller has determined a token should eventually have, and which swaps will move the token towards. Used interchangeably with “desired weight”.
• Initialized – Used to describe whether a pool owns a sufficient amount of a token to cover the minimum weight.
• Note: this is distinct from “pool initialization”, which acts in the place of a constructor.
• Portfolio – The basket of assets held by a pool.
• Portfolio Composition – The makeup of a portfolio, particularly with regard to the weights of each token.
• Underlying Tokens – The tokens held by a pool.
• Index Tokens – Liquidity provider tokens for a pool. These represent ownership of the underlying assets in a pool.
• Rebalance – The process of changing the composition of an index pool.
• Re-weigh – The process of re-assigning the target weights of the current desired tokens in an index pool.
• Re-index – The process of re-assigning both the desired tokens in an index pool and their target weights.

Early Governance

Indexed Finance order to ensure the security of the project while distribution is underway, the team will retain the ability to create and vote on governance proposals while our tokens are vesting. This will ensure that we are able to respond if security incidents occur prior to the completion of the initial distribution, but all successful proposals will still be subject to the two day time lock. Additionally, the voting period on the governor contract is temporarily set to a value which corresponds to about 12 hours in blocks; after January 7, 2021, anyone can call a function on the governor to set the voting period to its permanent value, which is closer to 3 days.

PoolInitializer

This uses a short-term UniSwap price oracle to determine the ether value of tokens sent to the contract. When users contribute tokens they are credited for the moving average ether value of said tokens.

When all the tokens needed are acquired, the index pool will be initialized and this contract will receive the initial token supply (100).

Once the contract receives the index pool tokens, users can claim their share of the tokens proportional to their credited contribution value.

Security

Because of limited availability, the Indexed Finance contracts have not been audited by an established security firm; however, the core contracts have been audited by two independent security experts: Daniel Luca, a former auditor for Consensys diligence, and Mudit Gupta, previously the lead blockchain engineer at Polymath.

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