Introducing the Metaverse Index (MVI) — by Index Coop
The Index Coop is excited to introduce the Metaverse Index — MVI.
MVI is a basket of 15 tokens, designed to capture the trend of entertainment, sports and business shifting to a virtual environment. The index will be represented by an ERC20 token and will be available for purchase at tokensets.com.
In this post, we will cover:
- Why the Metaverse Index
- The methodology
- Where to buy and use MVI at launch
Why the Metaverse Index?
One of our favourite definitions of the Metaverse comes from Enjin, one of the underlying projects in our index:
The “metaverse” is a shared digital space that seamlessly integrates aspects of the real world — specifically things like ownership, identity, and financial value.
This shared digital space is enabled by advances in blockchain and virtual reality technologies. Inclusive, user-focused token economic design is one of the key innovations taking place at the intersection of the two technologies. It creates an opportunity for anyone to own a piece of the metaverse and the value that it unlocks.
Virtual worlds and digital experiences themselves are not a new phenomenon. We’ve seen the trend towards digitisation accelerate as more and more people turn to the virtual realm for business, entertainment, and a whole range of social interactions.
At a high level, the Metaverse Index is designed to turn this trend into a single investable token.
There are 4 major benefits of using MVI:
- Simplicity — MVI presents a simple way to capture a broad market trend, based on the idea of the metaverse, without having to constantly research and rebalance a portfolio.
- Risk management — Volatility of individual tokens is offset by holding an index.
- Cost efficiency — Reduced gas fees when compared to buying and selling tokens individually.
- Transparency — The index follows a set of transparent rules to assess tokens for inclusion and removal.
Launch Composition
The methodology — nuts and bolts
Index Coop products follow strict methodologies and MVI is no exception. Below is a high-level overview.
- Initial screening process
To kick off the portfolio construction process, we screen for the following token categories on Coingecko: Non-Fungible Tokens, Entertainment, Virtual Reality, Augmented Reality and Music. For tokens that pass the initial screen, we consider whether they have an ERC20 token, are above $30 million in circulating market cap and have sufficient liquidity on decentralised exchanges (DEXs).
- Fundamental token review
Following the initial screening process, we review the tokens that qualified. The metaverse space, with all of the sectors it encompasses, is still rather nascent and requires some qualitative oversight. During this stage we consider if a token has been classified correctly and fits into the metaverse narrative, if a project has plans to move to Layer 2 and how that might affect their DEX liquidity, and any other considerations that might disadvantage passive holders.
- Portfolio construction
The MVI uses a combination of the square root of market cap and liquidity weighting to arrive at the final index weights. We believe that liquidity is an important consideration. The space overall is rather nascent still and shallow liquidity complicates on-chain rebalancing and portfolio allocation.
The final index weights are calculated using the following formula:
TW = 75%*RMCW + 25%*LW
where,
TW — token weight in the $MVI
RMCW — square root of market cap weighted allocation
LW — liquidity weighted allocation
Where to buy and use MVI at launch
The MVI launch is scheduled for April 7th at 12pm PST. The token will be available for purchase on TokenSets as well as through Uniswap. Users can also mint the MVI Index token directly using underlying components on TokenSets.
We will also be introducing a liquidity mining incentive program for liquidity providers in the Uniswap MVI/ETH pool. LP tokens can be staked here. The program will kick-off on April 8th at 12PM PST (24hrs after launch) and will run for 90 days. The program will begin with a target of 35% APY on a pool size of $5m for the first 30 days. Rewards beyond 30 days will continue to target $5m liquidity, based on the average mining returns over the prior 7 days. If the pool is larger than $5m, then the rewards would be reduced in proportion ($10m pool would get ½ the rewards). Likewise, a smaller pool would get an increased incentive.
As another little bonus, we will be airdropping APY.vision NFTs to 10 randomly selected addresses that provide over $10k liquidity to the MVI/ETH pool in the first 24 hours. These NFTs are redeemable for 90 days of APY vision PRO, allowing you to track your LP positions with a professional suite of tools. Perfect for keeping tabs on the MVI/ETH pool!
To celebrate the months of hard work, we will be hosting a launch party for the MVI token in the Decentral Games’ Tominoya Casino in Decentraland. It’s only fitting that both projects are part of the Metaverse Index. This will be a free to play event with some music, prizes and great vibes. We hope to see you there!
Resources
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