Simple Summary

It is proposed to update the composition of the sDEFI index synth. The DeFi space moves quickly. The index tracking DeFi should reflect the rapid pace of innovation and development.

Abstract

In light of efforts to make the sDEFI and iDEFI index products reflect the rapidly changing DeFi sector, the proposal is to keep with a quartlerly cadence to update the index by adding and removing components while rebalancing the index composition. This SCCP provides for adding to sDEFI:

  • SushiSwap’s SUSHI
  • 1inch.exchange’s 1INCH
  • Bancor’s BNT

This SCCP further provides for removing from sDEFI:

  • Wrapped version of Nexus Mutual, wNXM

Additionally, this SCCP proposes the sDEFI index synth to be paused from trading during the rebalance period. At the end of the rebalancing, the sDEFI will trade at roughly the same index price as it currently trades at. However, since this will effectively be a newly constructed product, some users may wish to exit the sDEFI prior to rebalancing.

The Spartan Council was presented with three different options for weighting the index. The Council in principle agreed to the following proposed weightage:

% Weightage Ticker Units
15.00% AAVE 4.72
15.00% SNX 87.20
15.00% UNI 100.71
10.00% MKR 0.54
5.00% YFI 0.01604
5.00% SUSHI 43.11
5.00% COMP 1.55
5.00% UMA 26.06
5.00% REN 680.59
5.00% CRV 254.95
5.00% KNC 334.06
5.00% BAL 14.84
2.50% 1INCH 71.83
2.50% BNT 90.66

Motivation

The purpose of the updated sDEFI and iDEFI index synth is to attract traders wishing to gain exposure to the burgeoning DeFi sector.

Some have claimed the January is month 6 of a 36 month DeFi bear market, while numerous ALT/USD pairs have nevertheless appreciated considerably since last fall.

The goal of the index is to provide exposure to the most innovative projects in DeFi right now. As the DeFi space continues to move quickly it is quite possible for previously excluded assets to rejoin the index. BNT is an example of this. In previous indices, BNT was removed. In the latest iteration BNT managed to get back into the index.

Copyright and related rights waived via CC0.