CoinDesk’s DeFi Index
The DFX provides a market-cap-weighted benchmark for a representative basket of DeFi sector cryptocurrencies.It is replicable by professional investors operating from regulated jurisdictions that are integrated with global financial markets.The DFX is composed of assets suitable for long-term holding, based on their measured liquidity, their support by reliable service providers and their longevity among the most-valued crypto assets.
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DFX is a composite benchmark index based on CoinDesk’s single-currency reference rates for:
- Uniswap (UNI)
- Aave (AAVE)
- Compound (COMP)
- Curve (CRV)
- MakerDAO (MKR)
- SushiSwap (SUSHI)
- Synthetix (SNX)
- Yearn Finance (YFI)
- UMA Protocol (UMA)
- Bancor Network Token (BNT)
DFX constitution and weighting processes were created by CoinDesk Indices and are calculated by TradeBlock, a CoinDesk subsidiary. DFX constituent weights are calculated based on the latest dollar-denominated value of each constituent and its corresponding circulating token supply. Index constitution is reviewed on a quarterly basis.
The circulating token supply includes all tokens generated from a network’s transactions, block rewards and, when applicable, uncle rewards and/or scheduled supply adjustments. The circulating token supply for each DFX constituent is updated via network nodes operated by TradeBlock at 4 p.m. Eastern Time each day.
The market-capitalization weighting for each constituent is calculated daily by multiplying the circulating supply for each constituent by its end-of-day price. Circulating supply is observed from network nodes operated by TradeBlock at 4 p.m. Eastern Time each day. End-of-day price is measured as the 24-hour VWAP of the corresponding CoinDesk reference rate or Price Index. The weighting calculation determines the percentage share of each, relative to the aggregate market cap of all constituents. The market capitalization for each currency is then used as the weighting for the subsequent 24-hour DFX calculations. This process is repeated every 24 hours to recalculate daily weightings.
CoinDesk Indices are the industry standard for institutional single- and multi-asset benchmarks for crypto assets. The flagship CoinDesk Bitcoin Price Index (XBX) has been in operation continuously since 2014. Financial institutions rely on the XBX and other CoinDesk Indices products to benchmark billions of dollars in assets under management and to price millions in over-the-counter transactions, daily.
Single-asset reference rate values are algorithmically calculated once every 5 seconds at minimum, based on observed trading activity on leading exchanges. The reference rates are designed as reference rates to track liquidity while also adjusting for deviations caused by anomalies and manipulation attempts at individual exchanges. The precise formula underlying the single-asset reference rates is proprietary. The reference rates are distinct from CoinDesk Price Indices, which have different requirements and are calculated once every second.