$CEX Index Creation

This proposal is a work in progress and below represents a draft for the future “Centralized Exchange” Index. Please give feedback as appropriate.

Cover Image

Just like with my $INFRA proposal I’m slacking on my graphic design.

Rationale

As much as I’d like to get paid in crypto, fiat on-ramping to the Ethereum block chain won’t be going away anytime soon and capitalizing on the success of centralized exchanges would appear to be a practical and risk averse play. Centralized exchanges offer these tokens typically as a part of a fee sharing program where in portion of the fees collection from makers/takers on the app are split among coin holders. Exchanges also typically offer some staking program for their coin to earn reasonable yield, although it is not clear if we will be able to take advantage of this.

To ballpark the current growth seen in the area, crypto.com had at the end of February doubled its user base in only fourth months. Binance has grown to 101 million in Q3 2020, compared to 5.8 million in the Q2 2017.

Currently the only major competition to this proposed CEX index is the sythetix sCEX which holds a subset of the proposed tokens.

Index Composition

The index would be composed of ERC20 tokens issued by centralized exchanges that have a market cap above $100k USD. The market cap cut off is arbitrary, but does allow for access to a handful of smaller-cap coins to be included while not diluting the index. I have chosen to initially include sBNB in the composition, however we may wish to remove BNB for liquidity concerns or due to its “hostile” nature towards the Ethereum blockchain.

Ticker Website Market Cap (Millions)
sBNB binance.com 85531
CRO crypto.com 4869
OKB okex.com 4759
FTT ftx.com 4520
HT hbg.com 3667
LEO bitfnex.com 2090
KCS kucoin.com 1006
BTMX ascendex.com 898
GT gatechain.io 564
WOO woo.network 314
ZMT zipmex.com 289
MX mxc.com 123

Note: as of 24-04-2021 the market volatility has brought some of these down, but all are still above the 100 million cut-off

Allocation

To be discussed

Major Points of Discussion

  • Should sBNB be included in the index?
  • Should we pursue an even allocation, market weight based, optimize for SR?
  • Should we up the market cap cut off? Or instead choose only the top X by market cap for the index?

Details

Smart-contract: PieVault
Rebalance: Quarterly
Cap: Unlimited
Strategies: Staking of assets if possible on their respective exchanges

Modeling

No BNB, Market Weight
BNB, Market Weight (Hilariously bad)
BNB, Market weight, maxweight of 20%

I’m having issues generating modles using Tiramisu, I’ll be adding those once sorted out

Update History

  • 24-04-2021 Added 3 models

Polls

Include BNB?
  • Yes
  • No

0 voters