NEOPIN launches index products to diversify into Ethereum, AI-related cryptocurrencies. 👏👏👏 Meet ETH, AI Automated Diversification Products 😀
1️⃣ Introducing 7 cryptocurrencies of Ethereum Family Index(EFI) products selected by NEOPIN
- Ethereum(ETH)
- Ethena (ENA)
- Pendle (PENDLE)
- Metis (METIS)
- ether.fi (ETHFI)
- Lido DAO Token(LDO)
- Uniswap(UNI)
EFI Background
The Ethereum Family Index focuses on the most prominent and influential projects within the Ethereum ecosystem, highlighting Ethereum’s dominant presence in the blockchain scene. Ethereum is renowned for its smart contract capabilities, which have enabled the creation of decentralized applications (dApps), decentralized finance (DeFi) platforms, and numerous other innovations in the blockchain space. By integrating key Ethereum-based projects, the Ethereum Family Index allows investors to gain exposure to the core elements driving the growth and development of the Ethereum network. This index product includes tokens from major projects on Ethereum, offering a diversified portfolio that leverages the stability and innovation of the Ethereum ecosystem.
The Ethereum ecosystem is vast and continuously evolving. As of June 2024, Ethereum’s market capitalization surpassed $400 billion, making it the second-largest cryptocurrency by market cap. Ethereum powers over 60% of all decentralized applications (dApps) in the blockchain space. Liquid staking derivatives (LSD-Fi) have grown significantly within the Ethereum network, with platforms like Lido collectively managing billions of dollars in staked assets. The concept of restaking is gaining traction, enabling users to enhance their yield by staking ETH multiple times. These figures and trends highlight the extensive utility and continuous innovation within the Ethereum ecosystem, making the Ethereum Family Index a strategic choice for investors looking to capitalize on the growth of blockchain technology
2️⃣ Introducing 6 cryptocurrencies of AI Titans Index (ATI) products selected by NEOPIN
- Artificial Superintelligence Alliance(FET)
- The Graph (GRT)
- Worldcoin (WLD)
- AIOZ Network (AIOZ)
- Arkham(ARKM)
- Zignaly (ZIG)
ATI Background
The rise of AI in the market has been phenomenal, with AI technology becoming a global trend across various industries. As of 2023, the AI market is valued at over $150 billion and is projected to exceed $460 billion by 2028, growing at a compound annual growth rate (CAGR) of 25.1% (source: GlobeNewswire). This growth is driven by advancements in machine learning, natural language processing, and data analytics.
AI applications in Web 3 are rapidly gaining traction, with projects focusing on decentralized AI, AI-driven DeFi solutions, and AI-enhanced security protocols by leveraging the power of decentralized technology to enhance data security, transparency, and efficiency in AI applications. The AI Titans Index allows investors to gain exposure to these cutting-edge projects’ tokens, offering a diversified portfolio that captures the innovative spirit of AI in the decentralized world.
3️⃣ Concept
NEOPIN’s index product is akin to traditional financial Exchange-Traded Funds (ETFs) but tailored for the decentralized finance (DeFi). This index product allows users to invest in a diversified portfolio of crypto tokens with a single purchase. By holding an index token, users can enjoy the same effect as holding multiple assets simultaneously, mitigating risk through diversification. The primary benefit of using an index product is its simplicity and efficiency; it offers a straightforward way to diversify one’s portfolio, reducing the need for constant monitoring and individual asset management. Furthermore, the index is periodically rebalanced to ensure optimal performance and risk management, providing users with a dynamic and responsive investment tool.
4️⃣ Key Benefits
- Risk Management and Simplified Investment: Index products allow users to spread their investments across a variety of assets, reducing the risk compared to holding a single asset. This helps mitigate the impact of volatility in the crypto market by balancing losses from underperforming assets with gains from better-performing ones. Periodic rebalancing ensures the portfolio remains aligned with its investment strategy, maintaining a specific risk level or following market trends. Investing in an index product simplifies the process of managing a portfolio as index token automatically provides exposure to a selected basket of assets without the user needing to manually select tokens to invest and rebalance their holdings periodically.
- No Research Needed to Follow Trends: Index products are composed of tokens from promising projects selected and analyzed by NEOPIN’s analytics team, based on market trends. Through these index products, users can easily invest in trending and promising assets without the need for independent market research.
- Transparency, Security, and Interoperability: As a decentralized product, transactions and holdings of index tokens are recorded on the blockchain, ensuring both transparency and security. Additionally, users can utilize index tokens within various decentralized finance (DeFi) services. This interoperability allows users to easily trade or leverage their index tokens both within the NEOPIN ecosystem and on external platforms, enhancing the utility and flexibility of their investments.
- Convenient User Experiences: Users can easily participate in the index product with Ethereum (ETH), Tether USD(USDT), or USD Coin (USDC). As users enter the amount, the platform will recommend the best rate option for them to select, ensuring they get the most value for their investment. The NEOPIN Index product is designed to streamline the investment process, making it user-friendly and accessible for all types of investors.
5️⃣ Perfect for You, If You
- Hope to reduce risk through a diversified portfolio: This product is ideal for investors who aim to minimize risk by diversifying their investments across multiple assets.
- Find it difficult to select and invest in individual crypto assets: If you find it challenging to choose and manage individual crypto assets, this product provides a convenient solution with a strict selection on trending tokens in the market.
- Desire to conveniently manage investment portfolios in one go: Simply choose a trending theme and let the index manage the rest for you.
🚨Note: the Index product simplifies the investment process on multiple tokens and the management of the portfolio. Thus, unlike earning products, it does not generate yield and does not guarantee your principal.
6️⃣ How it Works
Our index product streamlines the process of investing in multiple crypto assets. When a user decides to buy or sell the index token, several mechanisms come into play:
- Flash Mint: This feature allows users to mint new index tokens by providing the necessary entry assets (e.g., ETH, USDT, USDC). These assets are then swapped through a decentralized protocol like Uniswap for the tokens that comprise the index.
- Flash Redeem: Users can redeem their index tokens for the underlying assets. They have the option to receive the individual tokens or swap them back for the original entry assets.
- Swap: For smaller transactions, users can swap their entry tokens directly for index tokens or vice versa through swap pools. This feature provides flexibility and convenience for managing investments.
Our product used historical data to backtest and validate the selection of tokens and the rebalancing parameters. This ensures that the allocation has not been overly concentrated in any single asset and each component token has had an effective allocation, promoting a balanced and diversified investment approach.
Methodology
Our methodology involves selecting and weighting tokens based on their market capitalization. To prevent over-concentration, we cap the allocation of any single token at the max. cap rate: EFI: 40% and ATI: 30%. Excess weight is redistributed proportionally among the other tokens in the index. The selection criteria include factors like network compatibility (Ethereum ERC20), market cap, liquidity, project history, and security reviews. These standards ensure that only high-quality, stable tokens are included in the index.
If you would like to see the full details, please see [Methodology] of the product details.
Maintenance
The ETH, AI Index is maintained quarterly, with updates occurring in two phases:
- Determination Phase: During the third week of each rebalancing month, we review and determine the necessary changes for the next quarter. This involves analyzing price and market cap data to ensure the index remains balanced and reflective of the current market.
- Reconstitution Phase: Adjustments, additions, and deletions of index components are implemented on the first business day of the quarter. This ensures that the index adapts to market changes and continues to provide optimal diversification and risk management.
By leveraging these methodologies, the ETH, AI Index provides a robust and dynamic investment product that adapts to market conditions while maintaining a stable and diversified portfolio.
For more information on backtesting, rebalancing, and how to use indexed products, check out NEOPIN Docs.
So, let’s go check out the NEOPIN ETH and AI index products. Stay tuned for the RWA index product as well 😊
Go to NEOPIN ETH, AI, RWA Index: https://app.neopin.io/index/
