NDX Finance Research Team

Exchange-traded funds (ETFs) are some of the most attractive investment vehicles for passive investors in the public equity markets. As an investment strategy, index investing increases accessibility for a range of investors by offering exposure to select assets while providing lower-cost diversification, trading, and arbitration opportunities. It reduces the time spent on research and alleviates the stress for those managing their money.

Indexed Finance’s first products proved capitalization-weighted index pools may replicate public equity indexed funds for digital assets and cryptocurrencies. Similar to the ETFs in the public equity markets tokenized indexed pools, created by Indexed Finance, offer investors exposure to digital assets without having to actively manage their portfolio.

The growth of the ETF industry is not an accident as the goal of ETFs is to replicate the performance of an index or a select financial instrument. According to ETFGI and Statistica, the total number of ETFs traded globally exceeded 7,602 in 2020 up from 7,083 in 2019. In 2003, the total was merely 276 ETFs. In 2020, nearly 160 ETF issuers offered ETFs. The three top issuers by AUM; iShares offered 374 ETFs with $2,078.12b AUM, Vanguard offered 81 ETFs with $1,579.54b AUM, and State Street SPDR offered 141 ETFs with $859.63b AUM.

Indexed Finance has an opportunity to become the major player in the future development of digital asset passive investment strategies by creating multiple tradable indices (represented as tokens of ownership) with a diverse set of underlying digital assets and cryptocurrencies.

However, along with the development of each ETF in the public equity space is a critical understanding to each ETF to foster accelerated and continued growth, each tokenized ETF created by Indexed Finance need a considerable number of documents and research to identify the objectives, risks, charges, and expenses for investors. While tokenized etfs are in an exploratory stage of advancement, defining the market standards for performance in a succinct fashion will grow the interest in the funds while supporting the larger crypto/defi community.

Documentation for each fund may include the investment case for the underlying digital assets; fact sheets on fund performance; a methodology guide outlined defining the protocol; an investment prospectus defining principal investment risks, management of the fund, and the fund’s investment strategy; a summary prospectus; and internal reports on a scheduled basis for the investment community.

Each of these documents serves a critical role in the existing tradfi market space, as used by the top players mentioned above. This research and documentation are consistently provided by growing ETF players such as Defiance ETFs, Ark Funds, and Proshares.


My proposal is to establish a team focused on internal data collection and document creation for the investing community of Indexed Finance which works in lock-step with the sigma committee. As the sigma committee establishes new funds with the support of the community, this team will provide investment-grade research and education to bolster the reputation of Indexed Finance funds and the project itself. This team would be focused on funds in two-fold, the research supporting Sigma committee fund development and the marketing of the fund post-inception.

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I think it would be nice to be able to set up something with a bit more information. But not sure how far it should go. Most of those documents produced by traditional ETF are legal requirements, not because most people really want to read them.

I think the methodology for each one is already pretty well documented, but it would be good to centralize them onto the Docs page as well.

I do think it would be great to set up some dashboards on Dune Analytics though. Graph out performance of each token within an index, index overall performance, balance percentages over time. Stuff like that. And once one has been made it wouldn’t take all that much to update it for each index’s specific tokens.

But, if you start giving out prospectus and investment documents you are just begging for trouble with the SEC.

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Don’t know if I agree with prospectuses and these documents ONLY being for legal requirements.

We’re going to release DEGEN and ORCL. How do you find out what the underlying tokens actually are? What are their market caps? History? You can go research it individually, sure, but that’s time consuming. A prospectus puts all that information in one place for the investor to consume and then make a decision on whether they invest or not.

Also, if NDX grows to where it should, then these documents will be either required or strongly demanded, legally or otherwise.

I also don’t see how publishing documents to inform investors on our indices, different sectors, etc. can actually harm Indexed.Finance.

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The list of tokens, their balances, and the values are right on the Index’s page on indexed.finance. As well as the value of the Index over time. I agree I would like to see more of that information as well, something that could easily be done with a tool like Dune Analytics. And I might mess around with doing something like that, when I get a chance.

At the moment, you could make the argument that it is a tool for “passive portfolio management strategies” and not in and of itself a security. But as soon as you start publishing documents like a prospectus, and calling everyone investors. You are admitting you think you are a security and that the SEC should start trying to regulate you, sue you, and/or all around make life harder. That is my concern.

I like the idea of consistent, centralized documentation for each index. Even if some of the information like tokens and weights are available, I think for new potential users of Indexed some more summary level information would be useful. I also think the performance information and dashboards would be awesome!

I would say that we should pilot this for a couple of of the index tokens and see if people see it as valuable and use it before creating a full blown committee for this purpose.

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I agree there is no downside to any one involved, those who want and would look for it appreciate the info have it and those who ignore it aren’t harmed by it being there to ignore.

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I think there is a good case for creating more comprehensive documentation, and agree with @Bedon292 that we need more detailed breakdowns of data over time, whether through Dune or a custom dashboard. As far as formal documentation about why investors should buy into these indices, with a structure similar to traditional ETFs, I think that might be a bit tricky legally as has been mentioned, though admittedly I am not that knowledgeable about what the regulatory landscape looks like on this type of issue. I think if we were to establish a research team, it should be geared toward:

  • Analysis of our existing indices
  • Analysis of other DeFi indices
  • Research on new management strategies, including identification of implementation challenges and solutions, and back-testing of performance

Just my 2 cents

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