Index Creation and Management Process
Last updated
Last updated
With its convenient tools, the Cryptoindex platform unites all stakeholders towards common goals, creating a single seamless process of creating, buying, and selling indexes. Cryptoindex allows creators to implement the most daring strategies in indexes, monetizing their knowledge and experience, and allowing users to find the right instrument for their risk profile.
The path starting with index creation and ending with redemption tokenization is detailed below:
Blockchain Selection: The creator chooses the blockchain on which the index will be created. Access to the specific blockchains is determined by the subscription level. More information in the Creators Subscription section.
Token Selection and Weights: The creator selects the set of tokens to be included in the index and determines their weights.
Fee Settings: The creator sets the commissions for entry, exit, and management of the index. More information can be found in the Fee Structure section.
Initial Funding Level: The index creator specifies the minimum amount needed to launch the index (at least $50K) and the timeframe within which that amount must be raised (3 hours to 30 days).
Group purchase: The index purchases are executed in batches and the index creator has to add the size of butches (group transaction), which must be collected to enter and exit the index (at least $10K).
Individual entry/exit parameters: The creator of the index has to determine the minimum transaction amount for each participant of the batch with possible options $100, $500 and $1000.
Smart Contract Deployment: A separate smart contract is launched for each index to ensure its security and enforce the parameters specified by the creator.
Index Selection: Users select the index to which they wish to contribute.
Funding the Pool: Index buyers send tokens to the index pool. Once the pool reaches the required liquidity level set by its creator, it is officially launched. If user interest is not sufficient (the required amount has not been raised within the set timeframe), the funds are returned to the users and the index will not be launched (users need to claim tokens to get it back).
Index Token Distribution: After the index launch, index buyers receive index tokens, representing their ownership share of the index pool.
Proof of Ownership: These index tokens prove the holder's ownership of the underlying assets in the index.
Proposal for Changes: The creator, a large holder, or a group of users can suggest changes to the composition of the index.
User Voting: Users vote on the proposed changes. If approved, the changes are implemented in the index composition. More information may be found in the Changing the Composition of Indexes section
Token Redemption: Index holders can redeem their index tokens at any time.
Return of Assets: Upon redemption, the underlying assets/equivalents in stablecoins (depending on the user’s choice) proportional to the holder's share are returned to the holder.
Fee Deduction: Any applicable exit and management fees are deducted during the redemption process.
Some indexes may have liquidity pools on DEXs for index tokens. In this case, users will be able to hold index tokens without the token issuance process on the platform. This way, users can enjoy the same privileges as index token holders on the platform without the need to pay entry/exit fees.
