[discussion] Top 10/20 Crypto Pie

Hi, this is not yet a proposal, more a discussion piece.

I’ve noticed a couple of companies have brought out ETFs of the top cryptocurrencies (top by market cap), Crypto20 was the first of course, and they do top 20. This discussion is to see if there is interest in pieDAO to create a new pie that is a bit like DeFI ++ but for the biggest crypto assets.

I have personally wasted gas on buys and sells and swops and would like a simple diversified pie. The BCP fits the bill to a certain extent, but for a simple diversified ETF/pie is too heavy on ETH and too light on others, so this would be different to the BCP because of the weighting.

Weighting
Index funds are usually weighted by market cap, or they are square root of market cap, or they are equally weighted. I think deciding the weighting would be a big factor, open for discussion on this.

Number
As for crypto selection, I’d want it to be the top 10 or 20 tokens. If we chose the top 10, that would (for now) rule out most of DeFI, but a top 20 would of course include those DeFi tokens.

Rebalance
Weekly or monthly…

Ok, that’s the bones of the discussion piece!

Are we only into Defi pies here?

Are the proposed inclusions ERC-20 tokens?

Ah - good question, I hadn’t actually considered that, but I guess they would have to be?

Does that mean wrapped versions of the non erc20 ones?

I think so, yes. Other proposals have run up against that as a problem as I recall.

I would, myself, love such a product as you’ve posted!

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I was always into the idea of making a large cap pie. Between synthetic assets and wrapped ones there is quite a bit of choices already.

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Very good point, can play around with this tomorrow :grinning:

Might be a good idea to study the way Invictus Capital have designed their crypto 20 fund. Not suggesting we do a copy paste at all, but probably a good jumping off point.

Good read, thanks for sharing.
I’m guessing a lot more assets will be available soon via BSC wrapping as well, I will investigate.

(:point_up_2: can I change my username here?)

I started with the Invictus fund, and also added to my initial list from Coinbase/Kraken as well. That gave me with 35 assets to begin. I applied some initial filters:

  • I excluded Bitcoin and Ethereum, since they are in $BCP
  • I removed three stablecoins from my list, as I feel that space is better covered by our $USD++ pie.
  • I removed 7 DeFi tokens as I feel those are better covered by the DeFi pies.

I was unable to find an ERC-20 representation of 8 items on my initial list: Algorand, Cosmos, Bitcoin SV, ICON, Kusama, Nem, Solana, or Lumen.

I did locate the following 15 (two without CoinGecko API response, however):

  • Cardano (CoinGecko API ID: sada)
    Cardano is a research-driven cryptocurrency
  • Bitcoin Cash (CoinGecko API ID: renbch)
    Bitcoin Cash is a BTC hard fork with an increased block size
  • Binance (CoinGecko API ID: sbnb)
    or Centralized Exchanges including Binance and Crypto.com (CoinGecko API ID: sCEX)
  • Dash (CoinGecko API ID: sdash)
    Dash is a payments-focused Bitcoin fork
  • Dogecoin (CoinGecko API ID: rendoge)
    Dogecoin is a decentralized, peer-to-peer cryptocurrency that uses the “Doge” meme as its mascot
  • EOS (CoinGecko API ID: seos)
    EOSIO is a blockchain protocol with fast transactions and zero fees.
  • Ethereum Classic (CoinGecko API ID: setc)
    Ethereum Classic is a ETH fork that focuses on immutability
  • Filecoin (CoinGecko API ID: renfil)
    Filecoin is a decentralized cloud storage network
  • Litecoin (CoinGecko API ID: sltc)
    Litecoin is a BTC fork with faster transaction confirmations
  • Polkadot (CoinGecko API ID: N/A; contract at “0x1715AC0743102BF5Cd58EfBB6Cf2dC2685d967b6”)
    Polkadot is a blockchain network designed to facilitate fast transaction confirmations
  • TRON (CoinGecko API ID: N/A; contact at “0xf2E08356588EC5cd9E437552Da87C0076b4970B0”)
    TRON is a blockchain platform where developers can deploy their own decentralized apps (dapps)
  • Monero (CoinGecko API ID: sxmr)
    Monero is a cryptocurrency focusing on privacy and fungibility
  • Ripple (CoinGecko API ID: sxrp)
    Ripple is a cryptocurrency that is built for payments
  • Tezos (CoinGecko API ID: sxtz)
    Tezos is a cryptocurrency designed to run smart contracts and decentralized applications.
  • Zcash (CoinGecko API ID: renzec)
    Zcash is a privacy-focused Bitcoin fork

Eyeballing CoinGecko and playing with the spreadsheet a minute lead me to think many/most of these have a very low market cap. Too small though? I’ve not had a minute to load ‘em in to Tiramisu yet.

My own preference would be: Cardano, Dogecoin, EOS, Filecoin, Polkadot, TRON, Monero, Ripple, and Tezos with the Centralized Exchanges being included for 10. Or, chop the centralized exchanges and mix it with $BCP :thinking::drooling_face::pie:

Great progress, thank you!

A general note - I was hoping for this to be a simple top 10 or 20, by market weight (possibly with % cap as per Invictus), so when you say no btc or eth I think that might be changing the idea too fundamentally. Yes I know people could get BCP in addition, but that kind of dilutes the strength of a top10/20 index.

Does that make sense?

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Sidebar - I’m happy to help do the research bit but I don’t even know what tiramisu is. Any resources ?

Totally understood! I even had a “this may be counter to the point?” note there in my drafts :sweat_smile:

How do you feel about the stablecoin exclusion? Tether is by some metrics Top 3.
Similarly, the DeFi exclusion? Uniswap for example may be considered Top 5.
I’ve pre-filtered out both. Largely, I think, because I had been approaching this from the composability with $BCP perspective. Thanks for clarifying your outlook :smiley:

You can read/watch about Tiramisu at How to use Tiramisu to easily create a Pie Model.

Would this pie also be regularly updated? For example after 6 months the top 20 might look quite different.

Yes, absolutely. I was thinking fortnightly or monthly, but don’t know yet what churn costs might be incurred.

Ah cool. Stablecoin exclusion sounds like a good idea. DeFi exclusion I’m not so sure of.

I think we are looking for a ‘set and forget’ kind of pie, then we are looking for growth via exposure to the basket of assets that have highest value on the exchange, and when a DeFi token like UNI is up there, let it enter the index. If and when it falls, let something else more valuable take its place.

I guess this pie is more like DeFi +L than BCP because it’s just trying to capture the index and isn’t weighting any coins more heavily (aside from what they justify by their nav/cap etc

Thanks, I’ll go follow that link.

Hey could any of you link me to where I can do back testing?

Actually, where do people do comparative performance graphs?

With ripple until the court case is concluded I would prefer to exclude it. (which is what Invictus has done) Just more risk than its worth I believe. Another coin has as much upside potential without the looming legal issues.

ok wait i think i figured it out - on coin gecko you can compare funds…