Index Cooperative (INDEX): Powering Passive Crypto Investing

What Is Index Cooperative?

In traditional financial markets, indices track economic themes such as technology, consumer staples, and utilities. Crypto index products are similar in that they track specific themes such as decentralized finance (DeFi), the Metaverse, and NFTs. Index Cooperative is a decentralized autonomous organization (DAO) that maintains top crypto indices on the market. Index Cooperative makes purchasing digital assets simpler and more cost-effective than if a buyer aimed to construct a crypto portfolio on their own. 

How Index Cooperative Works

Globally distributed community: Index Cooperative community includes skilled crypto-natives, traditional financial professionals, product managers, software engineers, and sales and marketing experts. 

Expert methodologists: Index Cooperative works with external partners - methodologists - who design the rules that govern a given crypto index product. One example of an external methodologist is Scalara, the founder of the DeFi Pulse index (DPI). Index Cooperative also works with Bankless, Metaportal, and Moonrock.

Leveraging contracts: Index Cooperative leverages smart contracts and other infrastructure from its founding partner, Set Protocol. Set Protocol allows users to generate, rebalance, and continuously manage a portfolio of Ethereum-based ERC-20 tokens. This collateralized basket of tokens is packaged by smart contracts and is exchangeable as a single token. This tokenization mechanism is what Index Cooperative uses to deliver its investment products.

Now that we know how Index Cooperative delivers investment tools and vehicles, let’s look at how Index Cooperative token (INDEX) helps power this ecosystem.

Index Cooperative Token (INDEX)

INDEX is, first and foremost, a governance token. As such, INDEX token holders can participate in the governance of Index Cooperative by voting for or against proposals on Snapshot (a popular decentralized voting platform). 

Individuals can earn INDEX as a reward by contributing to the growth and sustainability of Index Cooperative. In addition, individuals can purchase INDEX on secondary crypto markets. Beyond the utility of INDEX, Index Cooperative investment tools and vehicles also come with several potential benefits.

Benefits of Index Cooperative Products

Index Cooperative offers various index products. From newbies to experienced investors and retail or institutional buyers, Index Cooperative products enable several benefits for users:

• Liquid: Some Index Cooperative products are listed on centralized exchanges, on decentralized exchanges, and by digital asset over-the-counter (OTC) service providers.

• Simple: Index Cooperative products are tradeable as single ERC-20 tokens.

• Audited: Index Cooperative utilizes Set Protocol. Set’s smart contracts were audited by OpenZeppelin and ABDK Consulting in September 2020, ensuring the platform has been probed for various security vulnerabilities.

• Mintable: Tokens can be minted to represent underlying digital assets. Conversely, users can redeem these tokens for the underlying digital assets.

• Composable: DeFi composability allows tokens to interact with lending, staking, and pairing protocols.

• Auto-Rebalancing: Index Cooperative users don’t have to rebalance their own portfolios manually, as this process occurs automatically without additional transaction fees.

What Products Does Index Cooperative Offer?

Index Cooperative offers several different thematic index products that focus on a specific subset of the digital asset market. These indices provide passive exposure to digital assets, making them potential tools for both retail and institutional investors:

• DeFi Pulse Index (DPI): DPI is Index Cooperative’s flagship product. It is a capitalization-weighted index that tracks the performance of several DeFi assets.

• Metaverse Index (MVI): A crypto index designed to capture the shift to decentralized gaming, sports, and virtual environments.

• Data Economy Index (DATA): A crypto index designed to capture the investment in web3 infrastructure and the new data economy.

• Bankless BED Index (BED): This equal-weighted crypto index of BTC, ETH, and DPI give investors purposely measured exposure to popular crypto assets.

• Bankless DeFi Innovation Index (GMI): GMI is a DeFi index aiming to capture the upside potential of DeFi application themes.

• Flexible Leverage Index (FLI) series: An FLI index token allows investors to leverage a collateralized debt position (CDP) safely and efficiently by making it manageable from a simple index token. The leveraged token options include ether (ETH) and bitcoin (BTC) leveraged tokens (ETH2X-FLI and BTC2X-FLI, respectively), among others.Note: FLI products are not available for purchase in the United States.

• Interest Compounding ETH Index (icETH): icETH multiplies the staking rate for stETH while minimizing transaction costs and risk associated with maintaining collateralized debt in Aave. Token holders retain spot exposure to ETH and amplify staking returns up to 2.5x.