Thursday, June 20, 2024

Swiss index provider launches new product tracking 10 DeFi tokens

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Swiss index provider launches new product tracking 10 DeFi tokens

Switzerland-based fund manager Compass Financial Technologies has launched an index for 10 Decentralized Finance (DeFi) tokens dubbed the “Compass Crypto Basket Fundamental DeFi Index” (CCBFDEFI).

The firm was founded in 2017 and offers indices and services tailored to crypto, commodities, multi-assets and real estate. It manages around $5 billion worth of investment products related to its indices.

The CCBFDEFI went live on Feb. 22 and it provides institutional exposure to a group of 10 DeFi tokens that are individually weighted based on “ liquidity, market capitalization and protocol revenue metrics” and on-chain data.

The max weighting for any given token is capped at 35% and the group of assets is selected each month. The firm has listed more than 20 approved tokens that can be used as the components for the Index each month such as UniSwap (UNI) Compound (COMP) Aave (AAVE) and SushiSwap (SUSHI).

DeFi token allocation, CCBFDEFI Index: Compass Financial Technologies

Compass Financial Technologies CEO Guillaume Le Fur emphasized the institutional appetite for crypto exposure is “growing significantly” as firms seek out ways to invest in the sector in a compliant manner:

“Incorporating fundamental metrics in index creation offers investors the possibility to allocate in the most efficient DeFi tokens based on rational economic indicators.”

The CCBFDEFI is live on the firm’s website along with Bloomberg and Refinitiv and is compliant with EU Benchmark Regulations (EU BMR). The product is also available for use under a license agreement with Compass Financial Technologies.

Related: Automated order books eliminate DeFi costs and match CEX capability

Compass Financial Technologies also partnered with top crypto fund manager CoinShares in late January to provide its indices for reference prices as part of CoinShares Physical Exchange-traded products (ETPs) which take zero management fees and offer staking rewards.

In April last year, the firm launched a suite of EU BMR compliant crypto indices that covered areas ranging from reference prices to smart-risk control and volatility targets.