Pulse

Creates, maintains, and
licenses financial indices
for a decentralized world.

ACCESS DEFI PULSE INDEX

The DeFi Pulse Index is a capitalization-weighted index that tracks the performance of decentralized financial assets across the market.

No Impermanent Loss

Uses market capitalization for component weights, not fixed percent, so it does not suffer underpeformance from impermanent loss.

Cheap & Efficient

Eliminating the need to perform countless costly transactions manually saves you time and money.

Diversified Portfolio

Always less volatile than more concentrated portfolios. Downside protection due to holding a wider selection of tokens.

The DeFi Pulse Index
tracks important
DeFi assets.

View the exact holdings on TokenSets

VIEW HOLDINGS

DeFi Pulse IndexSource: Coingecko, Uniswap

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DeFi Pulse Index Construction

VERSION 0.2

Objective

The DeFi Pulse Index is a digital asset index designed to track tokens’ performance within the Decentralized Finance industry. The index is weighted based on the value of each token’s circulating supply. The DeFi Pulse Index aims to track projects in Decentralized Finance that have significant usage and show a commitment to ongoing maintenance and development.

Token Inclusion Criteria

As part of the inclusion assessment, DeFi Pulse considers a wide range of characteristics of the token, the project and the protocol. These criteria can be placed in four groups:

Token’s Descriptive Characteristics

  • The token must be available on the Ethereum blockchain.
  • The token must be associated with a decentralized finance protocol or dapp listed on DeFi Pulse.
  • 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

  • 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.
  • Token must have reasonable and consistent DeFi liquidity on Ethereum.
  • The token’s economics must not have locking, minting or other patterns that would significantly disadvantage passive holders.

Project’s Traction Characteristics

  • The project must be widely considered to be building a useful protocol or product.
    • Projects focused on competitive trading/holding, having Ponzi characteristics, or projects that exist primarily for entertainment, will not be included.
  • The project’s protocol must have significant usage.
  • The protocol or product must have been launched at least 180 days before being able to qualify to be included in the index.
  • The protocol or project must not be insolvent.

Protocol’s User Safety Characteristics

  • Security professionals must have reviewed the protocol to determine that security best practices have been followed to maintain user assets safe under different circumstances.
    • Alternatively, the protocol must have been operating long enough to create a consensus about its safety in the decentralized finance community.
  • In the event of a safety incident, the team must have responded promptly and addressed the incident responsibly in the aftermath, providing users of the protocol with a reliable solution and the decentralized finance community with adequate documentation to provide transparency about the incident. 
  • The selected tokens must have sufficient liquidity across a variety of trading platforms.

Index Calculation

The Index value is the spot value of the index.

  • Circulating Supply is the number of tokens circulating the last time circulating supply was determined. The first circulating supply was determined on September 8, 2020, using CoinGecko as a reference source.
  • Price is the market price of the token in USD.
  • Index Divisor is a constant that is adjusted on each rebalance. As of December, 2020, the Divisor was 35092014.36.

Index Maintenance

The index is maintained monthly in two phases:

Determination Phase

The determination phase takes place during the third week of the month. It is the phase when the changes needed for the next reconstitution are determined.

  • Additions and deletions: The tokens being added and deleted from the index calculation are determined during the third week of the month and published before monthly reconstitution.
  • Circulating Supply Determination: The DeFi Pulse Index currently references CoinGecko’s circulating supply number. The Circulating Supply is determined during the third week of the month and published before the monthly reconstitution.

Reconstitution Phase

Following publication of the determination phase outcome, the index composition will change to the new weights on the first working day of the following month. I.e components will be added or removed, and weights adjusted.

Any funds based on the DeFi Pulse Index will be expected to execute any buy and sell transactions on or shortly after the index reconstitution date.