This proposal is a work in progress and below represents a draft for the future “Infrastructure” Index.
I don’t have one but if someone could put “$INFRA” with a pie emoji on top of a futuristic server room that would be swell.
Over the life of Ethereum numerous projects have emerged that are less so the center of attention, but rather the backbone infrastructure for larger projects. These infrastructure projects have made themselves indispensable for integration and utilization of the Ethereum blockchain but as of yet have not been packaged into an Index product (Excluding the ORACLE index). These projects are largely broken into five sub-sectors:
Dex Aggregation - Projects which find optimal trade prices across multiple Dexs, typically offering additional services.
ETH Staking - With the launch of ETH2 comes staking. Projects in this area aim to provide something similar to “Staking as a service” allowing for individuals to deposit any amount of ETH and receive tokenized staked ETH.
Interoperability & Integration - The broadest category by far, projects in this area enable the integration or utilization of computing resources (storage, CPU time) provide access to blockchain indexes, or otherwise enable non-native code access to the blockchain. Currently around 250 billion in revenue is seen per year by the largest cloud provides for compute time (AWS, Azure, Google Cloud, Alibaba Cloud).
DAO Infrastructure - Dominated by Aragon, DAO infrastructure projects remove admin and governance work from the core dev teams of a DAO so they can focus on the objective of the organization.
Oracles - Real-world data access was perhaps the first form of infrastructure on the blockchain, allowing for access of a real-world data for use in smart contracts. Given the number of Oracles that currently exist it may be prudent to create an additional index for only Oracles or reorganize in some other way.
Miner-Extractable Value - MEVs focus on ETH mining optimization, insuring maximum profit for thee miners. As we transition towards ETH2 its likely that investing in this subsector will mean needing to time an exit.
In short: During a gold rush, invest in the guy selling shovels
Five major sub-sectors have been considered thus far, some are rather crowded and may require pruning to not over crowd the index. Please note that these numbers were pulled before the recent 10-20% pull back that is occurring now on April 17/18th.
|Market Cap||24hr Vol||Include||Strategy||Notes|
|SWISE||Unreleased||NA||No||Possibly add after Launch|
|Interop & Integration|
|CTSI||194||21||No||In $SCALE, fits better there|
|GEN||13||0.257||No||Liquidity too low, only 97k on UNI|
|CLNY||NA||NA||No||No liquidity available?|
|EGT||8||0.095||No||See Notes below|
|UMA||1811||136||No||Excluding all Oracles (for now)|
|ROOK||194||10||No||Should any new index have Eth1 mining?|
Allocation & Modeling
An even (8.33%) distribution model would seem to make sense as most of the assets are currently correlated with one another with the exception of LDO.
Major Points of Discussion
- Should Oracles be included at all? (Vote Below) If yes, we may need to prune some to keep the index a reasonable size.
- Any additional projects to add to the list for consideration?
- Should this index be broken out into 2 or 3? If so how would we structure them?
- Should UBT be included? It is more of a consulting firm that helps companies integrate blockchain tech. They accept payment exclusively with UBT. The are novel, but I am not certain if folks are comfortable including a consulting firm in the index.
- Whats up with ANKR’s liquidity? It seems to only have 700k available on uniswap.
Strategies: See table above. It is left to the implementation team to determine if deploying the listed strategy is feasible.
Good Faith Clause: Should issues with liquidity or problems arise implementing this proposal the development team is empowered to make changes as needed in good faith to realize the creation of this Index.
19-04-2021 - Added $COMBO, $ARCH, $ROOK. I have suggest that ROOK and ARCH not be added as they focus on ETH mining and including them would mean timing an exit from the positions.
20-04-2021 - Flagged CTSI as a non-include. Product is already in SCALE and accomplishes its integrations via two L2 implementations . Probably a better fit in only SCALE. Updated GLM to include, no issues found with the project, LP on UNI looks good. Updated all Oracles to “No”. This could obviously change with further discussion.
21-04-2021 - Added EGT (Elastic DAO) to Dao Infra, we are unable to include this token due to the unique governance model that would require us to vote in every DAO snapshot or risk being penalized. Also added CLNY (Colony), but liquidity does not appear to be available on any DEX.
29-04-2021 - I’ve updated UBT to be not included in the index. Working out a desirable model for this is difficult but I hope to have a reasonable allocation soon. I’ve also added HOT which I intended to add to the list several times now, but continue to forget.