DEFI Top 5 Index Coin Price & Market Data
DEFI Top 5 Index price today is $82.76 with a 24-hour trading volume of $307,647. DEFI5 price is up 4.0% in the last 24 hours. It has a circulating supply of 150 Thousand DEFI5 coins and a total supply of 149 Thousand. If you are looking to buy or sell DEFI Top 5 Index, Quickswap is currently the most active exchange.
What is DEFI Top 5 Index (DEFI5)?
DEFI5 is a tokenized ERC-20 Index that has a set of 5 underlying Decentralized Finance (DeFi) assets:
A brief history of DEFI Top 5 Index (DEFI5)
DEFI5 index pool is one of four flagship products by the Indexed Finance team. Indexed Finance is founded by Dillion Kellar and an anonymous person known as PR0. Currently, there are a total of 5 members working on the project.
The Indexed Finance protocol went live on Ethereum’s mainnet in December 2020. There are currently 293,019.18 DEFI5 in circulating at the time of writing (8th February 2021).
How does DEFI Top 5 Index (DEFI5) work?
Indexed Finance contract is a fork of Balancer’s pool contract that allows portfolio management to be done automatically, including the portfolio’s rebalancing.
DEFI5 pool is determined by a set of market capitalization-weighted index pools that track the performance of five DeFi assets by NDX governance.
The key criteria for assets to be included in DEFI5:
- The token is at least one week old.
- No major vulnerabilities have been discovered in the token contract.
- The token's supply cannot be arbitrarily inflated or deflated maliciously.
- The token does not have transfer fees or other non-standard balance updates.
- The token meets the requirements of the ERC20 standard.
- The token has a fully diluted market cap of at least $50 million.
- At least $1 million worth of liquidity is locked in the Uniswap token-WETH pair
- The token is a protocol or governance token for a DeFi project.
You can find more information on the terms for pool inclusion here. The NDX token holders can suggest which new asset to be included in the DEFI5 index.
Token categories are sorted in descending order of the tokens' market capitalization using a weekly moving average (MA) of the tokens' prices. The weight of the underlying assets is the square root of their fully diluted valuation (FDV). This will reduce the degree of difference between larger and smaller FDV.
The value of indices is calculated as the total value of underlying assets over the total pool supply. For example:
10th March 2021
- Total value of underlying assets (Market Cap) = $24,414,288.81
- Total pool supply = 218,223.42
- Value of DEFI5 ERC-20 = $24,414,288.81/218,223.42 = $111.88
DEFI5 pool rebalances its underlying assets to accurately represent the top five chosen assets in the DeFi sector over time. The pool’s rebalancing is done by buying and selling the underlying assets until it reaches the desired weight.
How can I obtain the DEFI Top 5 Index (DEFI5)?
Users can obtain DEFI5 in three ways:
- Providing the underlying assets to mint the token
- Use the Uniswap minter
- Buy it off the secondary market (Uniswap)
The index token holders can burn their tokens to claim the underlying assets or swap with built-in decentralized exchanges on Indexed Finance protocol.
Kindly note that if you mint, buy, or burn a single asset out of the five underlying assets, a 2.5% fee will be imposed and distributed to the LP holders in the form of the input token in any swap. If you buy, mint, or burn all ten underlying assets, the 2.5% fee is waived.
If you are keen to know what is the step-by-step to mint or buy the index tokens, please refer to this blog post.
What can you do with DEFI Top 5 Index (DEFI5)?
DEFI5 is perfect for those who want to invest in DeFi tokens but do not want to monitor individual tokens’ performance continually.
Additionally, you can save up on gas fees and trading fees instead of buying each of the assets.