ETH, AI INDEX Q&A

Q1. What are the Index product and Index token?

A1. An Index token is a decentralized investment product similar to traditional ETFs but focuses on cryptocurrencies. It allows you to have the same effect of investing in multiple tokens at once by holding a single index token, which represents a stake in various components tokens according to a pre-determined allocation. This provides a solution to minimize the volatility and risk of portfolio assets and invest in sectoral index fundamentals. The value of the index token fluctuates based on the performance of its component tokens.

Q2. How can I get an Index token?

A2. To get an Index token, follow these steps:

1. Go to the [Index] tab and choose a product you want to invest in.
2. Carefully review the product information, and choose the token you want to use to acquire Index tokens. * Entry tokens available are ETH, USDT or USDC and the minimum deposit is 0.001 ETH, 0.1 USDT and 0.1 USDC, repectively.
3. Enter the amount of your entry token and review the options between Flash Mint and Swap. Choose one option and proceed by selecting the [Mint] or [Swap] button according to your option choice. *The option with best return in terms of estimated amount and considering gas fees is automatically recommended and usually Flash Mint is suited for large size transactions while Swap is suited for small size transactions. (USDC does not support the swap option.)
4. As both Flash Mint and Swap options include swaps, users can also set the slippage tolerance as the deposit process includes stable swap between utilized assets. * The default is set to 0.5%.
5. Please make sure to review the estimates and agree to the “Terms of Use” before a transaction. Then, please confirm the transaction in your connected wallet. If you are using the NEOPIN App, a confirmation request screen will appear in the NEOPIN App.
6. You may check your Index tokens on your wallet [Balance] section after the transaction is complete.

Q3. How can I redeem my assets using index token?

A3.

1. Go to the [Index] tab and select a product you want to redeem from.
2. Select the [Sell] tab on the top of the input field and carefully review the product information, and enter the amount of your index token and review the options between Flash Redeem and Swap.
3. Choose one option and proceed by selecting the [Redeem] or [Swap] button according to your option choice. * The option with best return in terms of estimated amount and considering gas fees is automatically recommended and usually Flash Redeem is suited for large size transactions while Swap is suited for small size transactions.
4. As both Flash Redeem — ETH and Swap options include swaps, users can also set the slippage tolerance as the deposit process includes stable swap between utilized assets. (The default is set to 0.5%.) Yet, Flash Redeem — Components option returns components tokens from vault directly to users and does not include swap in the process.
5. Please make sure to review the estimates and agree to the “Terms of Use” before a transaction. Then, please confirm the transaction in your connected wallet. * If you are using the NEOPIN App, a confirmation request screen will appear in the NEOPIN App.
6. You may check your redeemed tokens on your wallet [Balance] section after the transaction is complete.

Q4. Who should use Index products?

A4. Index products are perfect for you if you:

1. Hope to reduce risk through a diversified portfolio: This product is ideal for users who aim to minimize risk by diversifying their investments across multiple assets.
2. 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 of trending tokens in the market.
3. Desire to conveniently manage investment portfolios in one go: Simply choose a trending theme and let the index manage the rest for you. This allows for efficient and effective portfolio management without the need for constant monitoring and adjustments.

Q5. What are the benefits of the NEOPIN Index product?

A5. NEOPIN Index products offer several key benefits for users as below:

1. 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.
2. 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.
3. 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.
4. 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.

Q6. What are the risks of the product?

A6. The risks associated with this Index product include:

• Regulatory restrictions on digital assets in your region.
• Market conditions affecting standard product operations.
• Changes in underlying assets’ values due to originating protocols’ decisions.
• Volatility, correlation, value at risk, and contagion risks.
• Underperformance due to deviations from the intended methodology.
• Volatility of component tokens leading to potential loss of principal.

Q7. I have participated in the Index product such as EFI, ATI but I don’t see my index token (such as EFI, ATI) in the deposit asset list, where can I check?

A7. By participating in the Index Product, you will receive an Index Token. Holding the Index Product does not generate any additional rewards, so it is not shown in the [Portfolio] section, but in the [Balance] section. You can check your balance and manage your assets in your connected wallet.

Q8. Does the Index product generate rewards?

A8. Holding the Index product does not generate additional rewards. The value of the Index token fluctuates based on the performance of its component tokens, and there is a risk of principal loss depending on market conditions. If you are looking for rewards generating products, you may need to consider other investment products on NEOPIN such as Staking, Pool and Derivatives.

Q9. How is the index product maintained?

A9. The Index product is maintained periodically and you can check details on the [View Details] > [Maintenance] section of the product.

Q10. What are the standards for the component token selection?

A10. Each Index product has a different standard of token selection. Please refer to each product’s [View Details] section.

Q11. Why is there a price impact when the index token is minted/redeemed?

A11. When index tokens are minted/redeemed, Uniswap is used to swap the entry assets (ETH, USDT, USDC) for the underlying component tokens. This process involves several factors that cause price impact:

1. Swap Fees: Uniswap charges a fee for each swap, which affects the overall cost of minting the index token. These fees are a percentage of the transaction and are deducted from the amount of tokens received during the swap.
2. Slippage: Slippage occurs when the price at which the swap is executed differs from the expected price due to changes in the liquidity pool.
3. Price Impact: The size of the transaction relative to the liquidity in the pool can cause price impact. When a large amount of entry assets are swapped at once, it can move the market price of the tokens being acquired, resulting in a less favorable exchange rate for the remainder of the swap.

To minimize effects of slippage, users can set a maximum slippage tolerance before proceeding with the transaction. If the estimated slippage falls outside this range, the transaction will not proceed, ensuring users get the optimal price for their swaps.

* If the price impact is large, you can minimize the price impact by splitting the asset into multiple smaller transactions.

Q12. Can I use Index tokens outside of NEOPIN?

A12. Yes, you can use Index tokens outside of NEOPIN. As an ERC20 standard token on the Ethereum network, Index tokens can be freely traded and transferred to any compatible wallet or used on the DeFi platforms.

Q13. I would like to participate in an Index product with a large (or small) amount of assets, which option is suitable for me?

A13.

• Larger Amount: For utilizing a large amount of assets, the Flash Mint/Redeem option may be suitable. Flash Mint/Redeem involves multiple swaps of each component token according to the allocation, resulting in less price impact compared to swapping in a single ETH-Index token pool. Please note that as it requires multiple swaps, it has relatively higher gas fees than the Swap option.
• Smaller Amount: For utilizing a small amount of assets, the Swap option may be more suitable. It involves one transaction and incurs lower gas fees than Flash Mint/Redeem which involves multiple swaps.

Please note that this is not a guide or advice on which option you must choose, but information that could help your decision.

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