Flagship CC10 Index - A retail friendly index to track the market

Author: pr0

Summary: A new index to take what we have seen from the last 1y and create a single, performant and most importantly representative retail friendly index, which bases allocations between BTC, ETH and tokens.

Crypto 10 (CC10)
The concept for the index is simple and uses some key observations.

CC10 and DEFI5 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 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 CC10
We will target an initial price of $100 for the CC10 token. During the bootstrapping phase, 50 tokens will be funded by pr0 to reach a total value of $5000 (or $100 per token). Once CC10 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).
Atleastb 50,000 holders to prevent concentration manipulations and hypervaluations without userbase.
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 sigma committee has authoority to have discretion about a tokens inclusion, to prevent scams and manippulated tokens entering the index, or if the tokens are seen as high risk for reasons such as security, marketing strat, team, or other reasons which may cause the token to be a risk to the index.

Proposed Tokens to Start

  1. btc, eth, shib, cronos, poly, ape, link, uni, ftx and sand

Using ETH as an asset we can remove the need for LP as the index can LP itself through the index AMM mechanism. This will also allow us to have an offering for indexed again to which can compare competitors and acquire users beyond highly speculative assets.

For sure we need a new flagship index, so am 100% behind this. A few questions:

  1. I’m not necessarily opposed, but why would this be a Sigma Committee index instead of on-chain? I’m going to add a question about the Sigma and Growth committees to the governance proposal as it’s a bit murky at the moment.
  2. I love that wETH and wBTC are core components to allow swap-in and swap-out without needing to fund index liquidity.
  3. Can we use NIRN to generate yield on the components with a conservative set of whitelisted lending markets? This would help boost index performance and protocol revenue.

I can’t comment on the proposed token list, there are objective criteria but the composition is always going to be somewhat subjective. My thinking here is to figure out what is going to draw the most TVL based on the target market for the index. We won’t be attracting any institutional investors, but we could certainly grab retail and financial advisor attention. What are they looking for to allocate 1-5% of their portfolio to a low cost passive crypto investment?

Great proposal. Let’s go!

Came to suggest / ask the same thing as @Ccwyz - this with NIRN integrated would be phenomenal.

Tbh Nirns a huge risk, it allows any hacked protocol to be a potential vulnerabiltiy for the indexes, and personally would be very against its use.

What exactly would be the risk with Nirn? I thought it was mostly a system to put the underlying assets into use (yield), what kind of risks would we have if we’d use it? (Apart from the contracts having bugs/unexpected behaviours)

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It exposes the risk to not just our contracts having vulns but every contract we use potentially being vuln aswell and causing fund loss.

But we could mitigate those risks by only using very reputable protocols, like Compound, Aave and so on. We might not be able to earn yield on every asset that way, but at least is something (lower risk lower reward).

I’d be in favor of trying Nirn on new indexes so Indexed has a better competitive advantage over other protocols and hopefully drive more adoption, but I’d understand as well if people would be more risk averse here after the hack we had last year…

Anyway the proposal here is on creating a new index to substite the old CC10 we had and got exploited, I’m completely in favor of it and that could be launched without Nirn support

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Yeah agreed can do for new ones