Announcing the Oracle Top 5 index (ORCL5)
We’re happy to announce the upcoming launch of the Oracle Top 5 index.
Since launching our two flagship indices DEFI5 and CC10, we’ve received hundreds of solicitations to build new and more innovative indices. By far, the most requested by our community was an oracle index.
Why an oracle index?
Along with the entire DeFi ecosystem, oracle projects are growing at an astonishing pace. This will hardly come as a surprise to most observers, as oracles power almost every major DeFi application, feeding much needed off-chain data into their smart contracts.
While it is clear that the oracle sector will continue to thrive, it is difficult to pick a winner among all the projects that exist today. With ORCL5, you won’t have to; instead, you’ll be able to invest in a passively managed index of the top oracle projects. It will track the performance of the five leading oracle projects and automatically adjust its composition as the market evolves and new projects enter the space.
Unlike the upcoming $DEGEN index, the Oracle Top 5 Index will use our core contract pools and thus share the same design as DEFI5 and CC10. As such, it will be a passively managed on-chain index pool that adjusts to the market over time.
Ticker symbol: $ORCL5
Top 5 tokens:
Chainlink (LINK): $30 billion fully diluted market capitalisation
UMA (UMA): $2.9 billion fully diluted market capitalisation
Band Protocol (BAND): $1.8 billion fully diluted market capitalisation
Oraichain Token (ORAI): $1.5 billion fully diluted market capitalisation
API3 (API3): $742 million fully diluted market capitalisation
Note that the target weights here are not derived from the traditional market-cap-weighting formula used by most index funds but the square root of their market cap, allowing them to be much more representative of the market sector. Using a traditional market cap weighting formula, LINK’s weight would be an order of magnitude higher than the smallest cap which is not the point of an index.
Will new oracle projects be added into the index?
The on-chain alternate token list will initially consist of DIA (DIA), Dos Network (DOS) and Tellor (TRB).
When the market cap of one of the alternate tokens surpasses the market cap of one of the tokens in the Top 5 list, it will automatically enter the index pool in lieu of the old token.
The alternate token list in return can be updated by an on-chain governance vote by $NDX holders.
When will ORCL5 launch?
The proposal is currently on-chain and has reached the quorum of 400,000 votes. The vote deadline is block 11874757 (countdown here: https://etherscan.io/block/countdown/11874757).
As previously announced, the team’s Gnosis safe helped push the vote across the quorum line as there were approximately 200,000 FOR votes and no AGAINST.
Once the vote ends at block 11874757 , the transaction to deploy the ORCL5 pool will automatically be queued and a 48hr timelock period begins.
During this timelock period, governance can theoretically cancel or halt the deployment.
This brings us to Thursday Feb 19th around 1pm UTC approximately when the transactions to deploy the pool will be submitted on-chain by the governance contract.
The pool’s life cycle begins with a so-called “crowdfunding” period during which anyone can submit money into the pool. Once the pool has reached its crowdfunding (min. capitalization) target it will be initialized and anyone will be able to mint ORCL5 shares on indexed.finance.
Will there be a liquidity mining program?
The ORCL5 index is not expected to launch with rewards for supplying liquidity, however a liquidity mining campaign to cover all indices on the platform is being proposed.
It will be up to $NDX holders to decide through governance whether any liquidity mining campaigns will be implemented in the future.
You can read proposals and join the discussion on the forum: https://forum.indexed.finance/
We’re excited to release our first new index since the start of the protocol in December. We hope the Oracle Top 5 Index will make it easier for the DeFi community to invest in this growing sector and look forward to developing it further along with our community.
Additionally, we are in the final stages of developing the community index pool design that will power the $DEGEN index and hopefully many others in the future as well as re-designing the UI of our app.