Index investing in DeFi — YDragon15 Jul 2022
The tool that is brought from TradFi and implemented on blockchain.
Index investing and indexes themselves have been created in traditional finance, and now their analogs exist on blockchain to solve the same tasks. What’s more, they’ve accumulated some experience to be shared, discussed, and taken as a basis for future index projects. This article is made to uncover the topic and show examples and your capabilities as a creator in the blockchain space.
Firstly, an index is a ranked list of assets that meet specific criteria set by the creator. Independent investors can fill their portfolios with the same assets as presented in the index, but it can be complicated due to assets’ clumsiness and high cost. To solve that, financial specialists came up with index funds providing single assets reflecting the share in a big portfolio. Thus, a person who holds only one asset invests in multiple and automatically follows the fund’s strategy.
How index investing works in DeFi?
Thanks to cryptocurrencies’ divisibility DeFi doesn’t face the problem of high pricing. However, it still basically requires keeping an eye out and operating your portfolio yourself. Index funds (further — IF) in this sector provide several features:
Diversification. An IF collects different coins in a certain percentage. Thus, the whole portfolio of volatile assets doesn’t rely on one’s fate.
Automation. IFs are software-based, meaning they can automatically perform the creator’s algorithm. There’s no need for investors to control anything manually except only their particular amounts of index coins.
Rebalance. The factor which combines the two mentioned above. IF’s algorithm can sell and buy assets right that second their value grows or drops. No ordinary person can do the same thing with the same efficiency or, at least, no one has to. So, the profitable coins stay, and others go away.
There’re many IFs on the market, and it’s not even necessary to mention them: you either know about those funds, or you can easily find them. Let’s just highlight some of their features.
The functions of an IF can be realized in a token a user holds or in a web/mobile platform he gets access to. The project itself can include only index operations, as well as offer additional features like staking, special trading tools, and strategies. Moreover, a platform can integrate tariffs for users: for instance, free access to basic functions and a paid subscription for anything else.
Ergo, building your index fund, you’re able to embed any option with the help of our team.
Rock’n’Block development — YDragon IndexPad
The latest example of our index development is YDragon’s IndexPad, and we’d like to show you a part of it.
The pictures don’t contain real information. They’re meant just to show you the interface.
The number on the top reflects the current price of a chosen index, and the chart under it depicts its price movements. Also, the page illustrates the token shares and other data useful for the user.
Here’s the page to observe the indexes available to enter and, also, information about their performance.
Furthermore, the author of the project wanted to have staking functionality too, so here’s how it looks.
You can find more information about YDragon on its website.
It’s needed to clarify that this is not a promotion of the YDragon project. We illustrate our case of a DeFi platform development. Please, conduct your research before investing in any project.
The project works on Binance Smart Chain, Ethereum network, and Avalanche.
The stack is:
This is how blockchain-based index funds work. There’re always lots of options both for users and creators. Therefore, only you decide what to use or build.
Talking development, pioneers benefit from the newest technologies, but those who go second can learn from them and give people something even more solid and exciting. We are a development team trusted by many to create DeFi projects. We offer you cooperation to build something great for you and the whole world!
Rock’n’Block’s team is not limited in development. We can help with:
⚡️NFT and NFT marketplaces development
⚡️NFT 10K generator
⚡️White label launchpad development solutions
⚡️Deflationary token development
⚡️Any other custom request from a crypto wallet development to custom blockchain development.
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