What makes a good index? There is no simple answer to this question, and it’s often highly subjective depending on a person’s risk tolerance. That’s one of the reasons Indexed.Finance has multiple offerings that cover different market sectors, risk tolerances, and weighting strategies.
All of these factors must be considered when composing a basket of assets. But, we are curious to see how some prominent Crypto Twitter personalities and other members of the greater cryptoverse might compose an index of their own. To that end, we’d like to introduce our first Crypto Index Contest organized by our amazing community member @Austinography.
This contest will see participants select 5 tokens out of the thousands listed on CoinGecko to include in an index of their own. The participants will also have to assign a static weight to each of the assets within their index.
A snapshot of prices will be taken at the outset of the competition and participants will have a hypothetical balance of $1000 allocated to their index assets based on the assigned weights. They will then be competing to have the best performing index over a 4 week period.
The weighting is where the primary strategy will come into play. Given the current market conditions, users will need to determine whether they will play it safe, giving heavy weight in their index to something like BTC or ETH, or even a stablecoin, or if they will throw caution to the wind and assign a volatile asset like DOGE, SHIB or some other meme coin a majority weight.
A more common strategy will probably be to maintain a balance between these two extremes, in an effort to mitigate risk while also exposing potential upside. That kind of exposure and risk management is ultimately the goal of most indices, and one of the reasons they’ve become a popular class in DeFi for smoothing the edges of an often volatile marketplace.
We’ve pulled in some of the best and brightest minds from Crypto Twitter to take part in this first contest and put their picks on the line against each other for the title of Top Indexer.
Plus many other members of the DeFi and Indexed community. With the success of this first contest, we hope to hold additional contests in the future that will change things up by featuring specific market sectors, market cap guidelines for inclusion, and different weighting strategies.
Details on the contest rules and each of the contestant’s indexes can be found at https://contest.ndx.holdings .
Good luck to everyone, and remember — Indexed We Trust!