Recommending Crypto to Friends & Family Just Became 10x Easier

Lemonade Alpha

Published in

The Index Coop

4 min readJul 22, 2021

Index Coop is on a mission to make crypto investing simple, accessible, and safe for everyone.

Bankless DAO’s purpose is to drive the adoption and awareness of bankless money systems.

With those shared values in mind, we are incredibly excited to announce the Bankless BED Index ($BED), powered by Index Coop. The BED Index offers anyone, anywhere passive exposure to the most promising crypto investment themes.

BED — which stands for Bitcoin, Ethereum, and DeFi — captures the upside of the three most investable crypto themes: digital gold, programmable money, and decentralized finance. The index will be represented by a fully collateralized ERC20 token and will be available for purchase on Uniswap v3, Index Coop, and TokenSets.

In this post, we will cover:

Why buy the BED Index?
Methodology and maintenance
Where to buy BED at launch

Why Buy the Bankless BED Index?

The BED Index provides a one-click, set-and-forget option for exposure to the best themes in crypto; buying quality, and filtering noise.

New investors in crypto today are often overwhelmed by the number of coins and tokens available to invest in. As an index that includes the most established cryptocurrencies and tokens, the BED index allows users a low-cost way to hold high-quality crypto assets with regular diversification.

There are 4 major benefits of using BED:

Simplicity — BED offers set-and-forget, 1-click crypto exposure.

Risk-Management — Volatility of individual crypto asset classes is offset by holding an index. Monthly rebalances prevent concentration.

Cost-Efficiency — Low streaming fee, reduced gas costs, and tax-efficient rebalancing.

Transparency — The index follows a set of transparent rules to assess tokens for inclusion and removal.

BED Methodology: What You Need to Know

The initial allocation of the BED index is: 1/3 Bitcoin, 1/3 Ether, 1/3 DeFi.

Bitcoin: represented as wrapped BTC (wBTC).
Ethereum: represented as wrapped ETH (wETH).
DeFi: represented as DeFi Pulse Index (DPI), a market capitalization-weighted index of top DeFi protocol tokens.

BED Composition at Launch:

Market Requirements

The components must have a large cap valuation $25b+ [If an index, the corresponding token market caps must have a sum of >$25b].
The components must show signs of heavy usage either as a network (BTC, ETH) or smart contract theme (DeFi).
The assets must have sufficient liquidity for initial inclusion and rebalances.

Technical Requirements

Available on Ethereum blockchain.
Trust-minimized assets.
The token must not be considered a security by the corresponding authorities across different jurisdictions.

Safety Requirements

Assets and themes within Bankless BED Index should have vast, well-established safety guarantees.
Any network/protocol must have conducted sufficient security audits and/or security professionals must have reviewed the protocol to determine that security best practices have been followed.

Index Maintenance

BED is maintained monthly in two phases:

Determination Phase

The determination phase takes place during the fourth week of the month. It is the phase when the changes needed for the next reconstitution are determined. Methodologist maintains the option to swap assets for productive versions of themselves (e.g. stETH or UNI LP pairs).

Reconstitution Phase

Following publication of the determination phase outcome, the index composition will change to the new weights on the first Friday of the following month, when components will be added or removed.

Fees

BED will have a streaming fee of 0.25% (25 basis points). The revenue generated from the streaming fee will be split 50% to Bankless DAO and 50% to Index Coop.

How to Buy BED

At launch, BED can be purchased at several venues, including:

In the case of high slippage for large trades on DEX, you can use exchange-issuance via TokenSets for better pricing (more info on using exchange-issuance is found here).