CC5 - Defi5/CC10/FFF replacement proposal

Author: pr0
Summary: A new index to take what we have seen from the last 10m and create a single, performant and most importantly representative retail friendly index, which bases allocations between BTC, ETH and tokens.

Crypto 5 (CC5)
The concept for the index is simple and uses some key observations.

  • CC10 and defi5 had large overlap
  • More concentrated assets performed better than more assets
  • The index assets were outperformed by ETH.

To that am proposing a sqrt marketcap which takes all assets including ETH and wbtc and the top tokens, creates a single asset, such that we can pool the TVL, liquidity and protocol interaction for all the last 3 into 1 new index.

Governance will be handled by Indexed Finance’s existing framework including the forums and Discord.

The Sigma committee will add or remove tokens from the index or alternate list regularly based on community feedback. Examples of changes may be adding new tokens if the alternate list is in danger of being emptied or adding or removing tokens from the index due to material changes in tokenomics or project direction. Community members can propose adding or removing a token from the active index or the alternate list at any time.

Further the community and sigma can update the strategies used / parameters, to increase how smart the index is by altering the scoring contract’s implementation.

Initial value of CC5
We will target an initial price of $100 for the CC5 token. During the bootstrapping phase, 100 tokens will be funded by pr0 to reach a total value of $10000 (or $100 per token). Once CC5 reaches its target value, the pool will be deployed giving anyone the ability to mint new tokens.

Token’s criteria
The index has the following criteria for inclusion:

The token has a market cap from $20 million (as calculated by a rolling 14-day TWAP on Uniswap).
There is at least $500,000 of liquidity for the token on Uniswap/Sushiswap.
No major vulnerabilities have been discovered in the token contract.
The token’s supply can not be arbitrarily inflated or deflated maliciously.
The control model should be considered if the supply can be modified through governance decisions.
The token does not have transfer fees or other non-standard balance updates.
The token meets the requirements of the ERC20 standard.
Boolean return values are not required.

The token is one of:

Protocol token for an Ethereum-based project.

Governance token for a DeFi project.

Wrapper token for a blockchain’s native currency.


I like the proposal overall, however, I have a few questions.

  1. With this CC5 index including wBTC and wETH, are these going to be like FFF and have a strict weight of 20% each?
  2. What are the 3 other tokens you have in mind? I would be happy with the inclusion of UNI, SUSHI, AAVE.
  3. How can we increase arbitrage for this Index?

On Arbitration:
I would like this index to be arbitraged quite often in order to increase revenue sent to the recovery fund. If all 5 assets were pegged to 20% I believe it would invite a lot more beneficial arbitrages as balances will need to be held more tightly in line.

Nah just sqrt mcap.
Whatevers the top 3 atm.
What. You dont, you simply up the trade and swaps between assets for revenue. Arbs value extraction from the pool, why would you want more.

1 Like

I’m just trying to think of a way to increase the revenue sent to the treasury, Burns seem to be the way that happens and it’s usually arb bots that do it.

So you would propose we let wBTC and wETH float using sqrt mcap in the index? wouldn’t they totally blow everything else out of the water?

I definitely agree that we don’t need to have both CC10 and DEFI5. However, I’m not sure if I’m onboard with collapsing FFF into this new token as well. I think it’s useful to have two separate indices here: one for DeFi and one for general Cryptocurrency. The biggest change this time around with be including native assets into the Cryptocurrency index.

I could see the breakdown like this: Defi (UNI, AAVE, etc). Cryptocurrency (WBTC, WETH, UNI, etc, etc.). In this scenario, the Cryptocurrency index would have the ability to incorporate other chains native assets if there ever is a stable market on ETH for them (wDOT, wADA, etc). While the Defi index wouldn’t include native assets at all. I find this distinction useful for investors because the Cryptocurency index could provide exposure to assets that aren’t specifically Defi. It’s the broadest index we could offer.

1 Like