The decentralized finance (DeFi) industry can be a minefield to the uninitiated as the space changes on a daily basis. It’s become normal to see assets become overinflated and destroyed in a matter of just a few hours.
Token sets, or indexes, are one way to get a better overall view of the ecosystem, and DeFi Pulse has just launched one.
Broad exposure to a number of rising DeFi tokens is often a better approach than piling everything into the latest DeFi flavor of the day. In order to achieve this, accurate data is needed for the top tokens in the industry just as it is for regular crypto assets.
Analytics provider DeFi Pulse has been the go-to source for the latest industry metrics and token performance. However, the popular total value locked (TVL) metric may be questionable as a measure of success since the values can be double-counted in some instances.
That aside, DeFi Pulse provides a lot of information on the top protocols and tokens on the scene and has just expanded its data to include a ‘DeFi Pulse Index (DPI)’ which rolls the top-ten tokens into one portfolio.
DeFi Pulse and Set Protocol Partnership
In a partnership with Set Protocol, the data provider has launched a permissionless index of the very best DeFi tokens. It stated that TVL was created to help the community interpret the value locked within the DeFi ecosystem, and it sees the DPI as a natural progression of that idea for the wider community.
The index is built on Set Protocol’s new v2 infrastructure and can be purchased as a TokenSet through its integration partners such as Zapper and Dharma.
The index is comprised of a diversified mix of tokens including YFI, LEND, COMP, SNX, MKR, REN, KNC, LRC, BAL, and REP. It is a passive index that tracks the performance of these tokens without engaging in traditional DeFi farming activity.
Token prices and circulating supplies are taken from CoinGecko, and the price per token has been multiplied by the circulating supply determines the circulating market cap. At the time of writing the market cap for the DPI was $662,700. The index is reweighted every month and below is a snapshot of the current list.
The DPI is an ERC-20 token which can be purchased on Uniswap to gain exposure to all of these assets without individually purchasing each one. It can also be used on other liquidity platforms and AMMs for staking purposes. Scott Lewis of DeFi Pulse stated:
We want a way that people can get exposure to DeFi without having to go and buy every token individually, because that costs a lot of gas,
Set CEO Felix Feng added that he thinks it’s going to be a key asset in the entire industry, with the anticipation that it will be used for yield farming. At the time of press, the DPI was trading at around $125 according to Uniswap.
There are a number of factors that go into the inclusion criteria, including a capitalization-weighted index with the value weight based on the project’s market cap. The legitimacy of the founding team and project is also considered and tokens and dApps must satisfy certain security and safety requirements such as official audits.
Listed tokens must be based on Ethereum and cannot be wrapped or synthetic, they must not be futures or represent real-world assets. There is a minimum launch period of 180 days and a minimum circulating supply that must be at least 5% of the projected token supply in five years.
The announcement added that it plans to further expand the DeFi Pulse Index with wallets, dashboards, and CEXs to further broaden its scope.
Set Protocol marketing manager Anthony Sassano has posted a guide on how to gain exposure to the new DPI.
Yam Finance Readies For Relaunch
In a related DeFi development, Yam Finance is preparing for relaunch on Friday, Sept 18. Yam kick-started the DeFi food farming frenzy back in mid-August offering an experimental elastic supply and a zero-value token for liquidity providers.
Farmers flocked to the protocol lured by huge yields on a number of pools. However, the crops didn’t last long as the discovery of a code bug in the rebase contract resulted in the team to launch a ‘Save Yam’ campaign.
Whales eventually rescued the unaudited protocol allowing it to migrate to v2 before sitting down for a rethink.
A month later and the team is ready to replant Yams following a full audit by security firm PeckShield. The migration from v2 to v3 will begin on Sept 18 at a 1:1 basis with no deadline. 50% will be immediately redeemable and 50% continuously vested over 30 days, the announcement added.
The new Yam protocol will have one liquidity pool, YAM/yUSD, with rewards totaling around 925,000 YAMs. 10% will be distributed in the first week and will decrease by 10% each following week.
YAM v2 token prices have already started to react following the announcement. A 40% surge has lifted it from $24 to $34 over the past few hours according to Coingecko. However, a pullback has brought prices back down to around $28 at the time of press.