EMI is the first true whole market index built on Ethereum. It is as a passive investment instrument for lazy investors and a benchmark for traders and analysts to beat.
EMI is the market index of things Built On Ethereum. It both represents the market and grows as Ethereum grows. When defining an index, you specify the size (in our case, how many Tokens to include) and the weights (the percentage one Token takes of the index). How many tokens represent the market? Why is the S&P-500 500? Questions like these led us to an objective definition of the size of the index based on a procedurally defined ruleset. Our goals: - Represent the market built on Ethereum. - Hands-off. Minimal inclusion ruleset. Let the market decide. - Implement the minimal Governance required to subjectively answer “Is this project built on Ethereum” and conforms to the inclusion criteria. Current Indexes such as DPI, fail at one or more of these criteria. The procedure definition: 1. Curate a list of "Built on Ethereum" ERC20 compatible coins. (We use Enzyme's list for our submission) 2. Exclude Tokens based on community consensus. These include: - Non Bearer assets (Synthetics, derivatives, wrapped tokens) - Non-Eth Chain (Projects that have a token but the project is not for or on Ethereum. - Stablecoins (Pegged or Non-pegged) 3. Start with the largest market cap Token and include it by default 4. Include the next Token if it satisfies the following rule: - If we include this token will it increase the Total Market Cap of included tokens by 1%? - If yes include it and try the next one - No: Stop here and define this as the size of the index 5. Determine index weights using the market cap of included tokens. Who will use the index? We focus on two use cases. Those whom: - Hold EMI a Passive investment in the Market on Ethereum. - Use EMI as a benchmark to measure success against.
How it's made
We use Enzyme Finance to deploy and manage the index, we trade assets using Enzyme's integrations with Dexes, and we define and deploy the index using HardHat scripts. We plan on using a Token Curated Registry to Tag tokens with reasons for exclusion from the index. A lot of the functionality from Enzyme, such as reporting and tracking the index comes out of the box from them. Also, the Index design fits well for our model rather than using an AMM.