About DeFiPulse Index Coin
DeFiPulse Index price today is $251.13 with a 24-hour trading volume of $8,755,312. DPI price is down -9.2% in the last 24 hours. It has a circulating supply of 260 Thousand DPI coins and a max supply of 259 Thousand. Uniswap (v2) is the current most active market trading it.
What is the DeFiPulse Index (DPI) token?
The DeFiPulse Index (DPI) token is a decentralized finance (DeFi) index token for the DeFi Pulse Index, a market capitalization-weighted index which consists of the 10 most popular Ethereum-based DeFi tokens. DPI token holders own, have exposure to, and can directly redeem the underlying tokens that comprise the index.
What is DeFi Pulse?
DeFi Pulse is an analytics and ranking website for decentralized finance (DeFi) protocols. It tracks and monitors each protocol’s smart contract on the Ethereum blockchain, providing crucial industry metrics such as Total Value Locked (TVL). DeFi Pulse is maintained by Concourse – a community of builders, enthusiasts and researchers who are committed to a free, bountiful, and decentralized future.
What is the DeFi Pulse Index?
The DeFi Pulse Index is a market capitalization-weighted index that tracks the performance of a basket of DeFi assets. Its weightage is based on the value of each token’s market capitalization, with the inclusion or exclusion of tokens defined by several stringent criteria.
The index seeks to lower the barrier of entry for individuals who lack the expertise to navigate the DeFi space while providing experienced users exposure to multiple DeFi assets through the ownership of a single index token.
Buying into the DeFi Pulse Index returns the DeFiPulse Index (DPI) token, which grants ownership, exposure, and the ability to redeem the Index’s underlying tokens. The DeFi Pulse index comprises of 10 assets, listed here in descending order based on their relative share: AAVE, Synthetix, Uniswap, Yearn Finance, Compound, Maker, REN, Loopring, Kyber Network and Balancer. As of December 2020, the Index had a market capitalization of $22 million.
Where and how do I obtain the DeFiPulse Index (DPI) token?
There are three main methods to obtain DeFiPulse Index (DPI) tokens:
- from a cryptocurrency exchange
- from TokenSets
- from TokenSets’ wallet partners.
For the first method, you may purchase DPI from a decentralized exchange such as Uniswap. For the second method, you may navigate to TokenSet’s explore page and choose DeFi Pulse Index from the list. Once there, clicking ‘Buy’ and following the relevant instructions will net you some DPI tokens and all the benefits they confer. Finally, the third method involves utilizing a wallet application which offers DPI such as Zapper, Monolith or Pillar.
How is the DeFi Pulse Index managed and maintained?
DeFi Pulse and Set Protocol jointly manage and maintain the DeFi Pulse Index using a defined methodology. Management of the index can be boiled down into two parts:
- the inclusion or exclusion of DeFi tokens and
- the calculation of each token’s index value
As mentioned, a DeFi token is only ever included into the index if its protocol satisfies several stringent criteria. These criteria can be broken down into four distinct characteristic groups: i) descriptive, ii) supply, iii) traction, and iv) user safety.
Descriptive characteristics refers to the qualitative aspects of a project. For instance, whether it lives on the Ethereum blockchain and is listed on DeFi Pulse. Supply characteristics details a project’s tokenomics – if it has a predictable supply, consistent liquidity etc.
Traction is concerned with how much utility a token provides – if there is a significant value proposition for the protocol or if it has considerable community usage/adoption. Finally, user safety evaluates whether audits and reviews have been conducted, and if the protocol has measures to address security breaches, should they occur.
Once these criteria are satisfied, the protocol will then have its index value calculated using circulating supply, market price and an adjustment constant.
For maintenance, two phases are conducted on a monthly basis, the determination phase and the reconstitution phase. The former takes place every third week of the month, and checks each token’s circulating supply, as well as for any additions or deletions of tokens from the index calculation. The latter phase then takes this information and updates the index’s weights on the first of the following month.
For more information on DeFi Pulse’s methodology and criteria, you may check out its Pulse webpage.
Where can I learn more about DeFiPulse and DPI?
To learn more about DeFi Pulse and the DeFi Pulse Index, you may watch DeFi Dad’s ‘How to Buy the DeFi Pulse Index by TokenSets’ video here: