Author: Bedon292 (Template stolen from redphonecrypto’s DEGEN proposal)
Summary: Proposing the launch of a new Low Cost Index as part of the Sigma pilot program.
The Low Cost Index (LOW10)
As its name implies, the Low Cost Index aims to find assets that have a low cost (<$1) and lower market cap than other Indices (<$1B). There is some definite overlap with other Indices like DEGEN, however the criteria specifically revolves around the share price. If a token is already involved in to many other indices the community could decide to now allow it in this one as well. Market caps range from $100 million to $1 billion. If a token’s market cap or share price outgrows the index, it will be automatically replaced with the largest market cap token on the pre-existing list of alternates (described below). In this way, the index will constantly evolve to capture upside from tokens during their most rapid growth phases. In the event that a token in the index is compromised or impacted by a bug, trading of the LOW token should be halted until it can be replaced in order to protect the index’s value. To protect against market manipulation, a token must have sufficient liquidity on its ETH trading pair.
Governance will handled by Indexed Finance’s existing framework including the forums, Snapshot, and Discord. The Sigma committee can 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 outgrowing the parameters of this index. Community members can propose adding or removing a token from the active index or the alternate list at any time.
The index has the following criteria for inclusion:
- The token has a market cap ranging from $100M to $1B
- The token has a value ranging from $0.10 to $1.00
- Once a token is sustaining value above $1.00 governance should start to phase it out in favor of an alternative.
- Should not allow the value to hit $2.00 before being phased out entirely.
- (I picked $0.10 somewhat arbitrarily as a way to get away from more ‘penny stocks’ which could wildly fluctuate and throw off the balance of the entire pool)
- The token does at least $50M in Volume on average.
- The token is not a “Stable Coin”
- This token is at least a week old.
- No major vulnerabilities have been discovered in the token contract.
- The token’s supply cannot 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.
- Sufficient liquidity is locked in a DEX (Uniswap, Sushi, 1Inch) market pair between the token and WETH.
- This does not apply to WETH.
- The token is one of:
- Protocol token for an Ethereum-based project.
- Governance token for a DeFi project.
The LOW Index Composition
Market caps and volumes pulled from CoinMarketCap Feb 15, 2021
1. Ren (REN)
$887M market cap ($7M REN-ETH Uniswap liquidity) $320M volume
RenVM makes it simple for projects to issue tokens on other blockchains creating inter-blockchain liquidity for decentralized applications (dapps).
2. Loopring (LRC)
$859M market cap ($20M LRC-ETH Uniswap liquidity) $121M volume
Loopring’s goal is to combine centralized order matching with decentralized on-blockchain order settlement into a hybridized product that will take the best aspects of both centralized and decentralized exchanges.
3. Basic Attention Token (BAT)
$789M on market cap ($4.6M in BAT-ETH Uniswap liquidity) $543M volume
BAT, is the token that powers a new blockchain-based digital advertising platform designed to fairly reward users for their attention, while providing advertisers with a better return on their ad spend.
4. Polygon (MATIC)
$515M market cap ($1.7M in MATIC-ETH Uniswap liquidity) $252M volume
Polygon (formerly Matic Network) is a Layer 2 scaling solution backed by Binance and Coinbase. The project seeks to stimulate mass adoption of cryptocurrencies by resolving the problems of scalability on many blockchains.
5. Decentraland (MANA)
$484M ($2.1M MANA-ETH Uniswap liquidity) $173M volume
Decentraland uses two tokens: MANA and LAND. MANA is an ERC-20 token that must be burned to acquire non-fungible ERC-721 LAND tokens. MANA tokens can also be used to pay for a range of avatars, wearables, names, and more on the Decentraland marketplace.
6. Enjin Coin (ENJ)
$439 million market cap ($1.6M in ENJ-ETH Uniswap liquidity) $81M volume
Enjin allows game developers to tokenize in-game items on the Ethereum blockchain. It uses Enjin Coin, an ERC-20 token, to back the digital assets issued using its platform, meaning that items can be bought, sold and traded with real-world value.
7. Ocean Protocol (OCEAN)
$401M ($3.9M OCEAN-ETH Uniswap liquidity) $137M volume
Through Ocean Protocol, publishers can monetize their data while preserving privacy and control, whereas consumers can now access datasets that were previously unavailable or difficult to find. These datasets can be discovered on the Ocean Market, where they can be purchased and later consumed or sold.
8. NuCypher (NU)
$269M ($2.1M NU-ETH Uniswap liquidity) $74M volume
NuCypher is a decentralized encryption, access control and key management system (KMS), encryption service for public blockchains. NuCypher offers end-to-end encrypted data sharing on public blockchains and decentralized storage solutions.
9. Orchid (OXT)
$223M market cap ($1.2M in OXT-ETH Uniswap liquidity) $106M volume
Orchid (OXT) is the native token of Orchid, a cryptocurrency-powered virtual private network (VPN).
10. The Sandbox (SAND)
$160M ($7.4M in SAND-ETH Uniswap liquidity) $185M volume
The Sandbox claims to be a virtual world where players can build, own, and monetize their gaming experiences in the Ethereum blockchain using SAND, the platform’s utility token. It is claimed that players can create digital assets (Non-Fungible Tokens, aka NFTs), upload them to the marketplace, and drag-and-drop them to create game experiences with The Sandbox Game Maker.
The LOW Index Alternates
$199M ($211k in STORJ -ETH Uniswap liquidity) $145M volume
Storj, pronounced as “storage,” is an open-source cloud storage platform. Basically, it uses a decentralized network of nodes to host user data. The platform also secures hosted data using advanced encryption.
$186M market cap ($255k in DNT-ETH Uniswap liquidity, $890k on SushiSwap) $55M volume
Billed as a “network of decentralized markets and communities,” district0x is a platform that allows users to easily launch their own decentralized platforms which are governed by a decentralized autonomous organization (DAO) structure.
$318M ($65k in CVC-ETH Uniswap liquidity) $183M volume
Civic is a blockchain-based identity management solution that gives individuals and businesses the tools they need to control and protect personal identity information.
Loom Network (LOOM)*
$105M ($64k LOOM-ETH Uniswap liquidity) $50M volume
Loom Network is a platform as a service that allows Ethereum Solidity applications to be run through side chains.
*Extremely low liquidity, may not be viable candidates.
I am not completely set on the $1 price point, could certainly move that point up a little higher, but I thought it was an interesting starting point. Someone else had mentioned a $1 index as well, so figured I would put it out there as is for now. It would likely increase the list of available tokens, and add some flexibility. Also not thrilled with the name, I just couldn’t come up with anything.
This does have an awful lot of overlap with another idea I had, which was purely a virtual world / gaming index, which is also overlapping the NFT index, but slightly different. I may put something together for that if people are interested.