Index Pricing Methodology

We use a combination of factors to determine the index pricing. Of the various factors, the daily volume of tokens in supply / circulation is used. And the ‘float factor’ of the volume changes will be applied to the market-cap and then the appropriate weighting is applied. We may also consider magnitude and directional sentiment, accuracy, the line-of-best-fit, as additional weightage factors in determining the Index pricing of each constituent.

We start by determining on an initial index value (for e.g. $1,000,000)

Calculated as SV (0) = 𝑖=1 𝑛 ∑ 𝑋 (𝑖, 0) × 𝑃 (𝑖, 0)

S𝑉 = Starting value of index on trading day t=0 (0)

𝑋 = Number of units of component i in index after cap and floor rules (𝑖, 0) applied

𝑃 = Price of component i in the index on trading day t=0 (𝑖, 0)

n = Number of components in the index

The index price is then calculated as follows:

C\operatorname{𝑃}\;_{(\operatorname{𝑠})}\;=\;\frac{(\;\;\sum_n^{i=1}\;\operatorname{𝑋}\;_{(\operatorname{𝑖},\;\operatorname{𝑡})}\;\times\operatorname{𝑃}\;_{(\operatorname{𝑖},\;\operatorname{𝑠})}\;)\;\;}{\operatorname{𝐷}_{(\operatorname{𝑡})}}

where

𝐷 = Index Divisor (𝑡)

As is standard, across all index calculation methodologies, the index divisor (D(t) above) will help to set the index price at a base level (e.g. 10,000). This divisor value will automatically be calculated depending on any significant changes to the constituent token such as market cap, arising from adverse changes (such as deletion or hard-fork), then, the Index Divisor will be changed to maintain index price consistency.