About Indexed Finance Coin
Indexed Finance price today is $6.23 with a 24-hour trading volume of $945,418. NDX price is up 1.4% in the last 24 hours. It has a circulating supply of 3.4 Million NDX coins and a max supply of 10 Million. Bancor Network is the current most active market trading it.
What is Indexed Finance?
Indexed Finance is a protocol that focuses on portfolio management and is similar to Exchange Traded Fund (ETF). The Assets Under Management (AUM) tracks the underlying assets’ performance.
Index pools are then tokenized into a token that represents the pool.
An Automated Market Maker (AMM) mechanism is integrated on the Indexed Finance protocol to rebalance the index pools. NDX token holders passively manage the pools via governance, including management strategies and the market sector’s definition.
A brief history of Indexed Finance
Indexed Finance was founded by two people, Dillion Kellar and an anonymous person known as PR0. Currently, there are a total of 5 members working on the project.
Indexed Finance started in August 2020, and it went live on Ethereum mainnet in December 2020. The project had an initial private investment by Molly (The creator of HEGIC) and one of the founders, totaling ~$125,000.
They continued to have several fundraising rounds, and the total investment for Indexed Finance is ~$525,000 as of February 2021.
How does Indexed Finance work?
Currently, Indexed Finance has one product, a set of market capitalization-weighted index pools that track a given sector’s performance, represented as lists of tokens managed by NDX governance.
There are currently four pools available under this product focusing on the Decentralized Finance (DeFi) sector. Each of the pool is tokenized into an ERC-20 index token respectively:
- DEGEN Index (DEGEN)
- Cryptocurrency Top 10 Tokens Index (CC10)
- Oracle Top 5 Index (ORCL5)
- DEFI Top 5 Tokens Index (DEFI5)
The formula used to determine the weight of the underlying assets of each pool is the square root of their Fully Diluted Valuation (FDV). This allows the AUM to have an order of magnitude difference between the highest and lowest FDV.
The indices’ value calculation is simply the total value of underlying assets over the total pool supply.
Each index pool rebalances its underlying assets to accurately represent the market sectors 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 ERC-20 version of the index pool?
Users can obtain CC10 and DEFI5 via three ways:
- Providing the underlying assets to mint the respective tokens
- 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.
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 an NDX token?
NDX is the native token to Indexed Finance protocol, and it acts as the governance token. The community can decide which assets to represent a given market sector.
Here is a list of responsibilities of NDX token holder in Governance:
- Upgrading proxy implementations as needed.
- Deploying new index pools.
- Managing the token categories which indices select from and creating new ones.
- Approving pool controllers that implement new management strategies.
- Setting configuration values such as swap fees.
Votes are done on-chain. The quorum for on-chain votes is 400,000 NDX or 4% of the total supply.
Note that there is no reward distributed for governance voting on Indexed Finance at the moment.
How do I obtain NDX?
There are two ways you can obtain NDX:
- Buy it off the secondary market
Users can buy or trade NDX via Uniswap
- Liquidity mining
Users can stake CC10, DEFI5, or the Uniswap LP tokens for their respective WETH pairs and earn NDX as a reward. Check out our yield farming page to know how much can you earn:
On top of staking, the stakers can earn a fee whenever a singular asset is swap, mint, or burn (2.5% fees are incurred every time a singular asset is provided into the indices in exchange for the index tokens).
Has Indexed Finance been audited?
Indexed Finance contract has only been audited by two independent security experts: Daniel Luca (a former auditor for Consensys diligence) and Mudit Gupta (The blockchain engineer at Polymath).
You can find the reports here: