⚪CBI 11: Crypto β Index

Overview

Index Summary

1. Index Name: Crypto β Index (CBI 11)

2. Investment Objective:

   Crypto β Index is an index based on an index strategy, aiming to provide investors with an opportunity to participate in the crypto currency market. The product tracks an index based on the trading volume and price movements of Ethereum (ETH), and adjusts the weights of ETH and non-ETH assets according to a set of predetermined rules. The investment strategy of this product aims to optimize the portfolio allocation based on market performance and volatility.

Investment Strategy

A. Investment Assets

Crypto currencies:

ETH serves as the underlying asset for the index's base holdings, while non-ETH assets are supplementary holdings that are dynamically adjusted based on market conditions.

B. Investment Approach

1. Index Composition:

The index holds ETH as the core asset and non-ETH assets as supplementary holdings. The non-ETH assets are selected for index composition based on market capitalization, returns, and circulating market value, with the top "n" blockchain tokens being included.

2. Criteria for Selecting Non-ETH Holdings:

	target	period
Launch Time		>6month
Market Cap	>100m	3month
Volume	> 30m	3month
Staking Ratio	> 15%	3month
Reward	> 1%
Staking Market Cap	>50m
PE (Price/Earnings)	<30%
Income	>10m	3month
Circulating Market Cap	> 40m	3month
Turnover	> 50m	3month

C. Index Calculation

Period: The public blockchain and weights will be adjusted at the beginning of each quarter, every three months.

Index Adjustment: In order to maintain index continuity, the index will be adjusted using the "divisor adjustment method" when there are changes in weights or the constituent public blockchains.

$\frac{\mathrm{\ Pre-adjustment\ Index\ }}{\mathrm{\ Original\ Divisor\ }}=\frac{\mathrm{\ Post-adjustment\ Index\ } }{\mathrm{\ New\ Divisor\ }}$

Weight Determination for Non-ETH Chains:

$w_i=\frac{{\mathrm{\ Volume\ }}_i}{sum_{i=1}^n(\mathrm{\ Volume\ } )}$

Calculation of Net Asset Value (NAV) for ETH and Non-ETH:

Calculation Process for Non-ETH Weighted NAV with Added Earnings:

${\mathrm{\ price_ratio\ }}_t={\mathrm{\ price}}_{t\ }/{\mathrm{\ price}}_{t0}$

Where t0 is January 1, 2021, and if the public blockchain was launched after 2021, then it will be the first day of its launch.

${price_ratio}_{Added\ Earnings}=\mathrm{\ price_ratio\ }\ast(1+apr/12\ast3)$

$\mathrm{Non-}ETH_\ price_ratio_{Added\ Earnings\mathrm{\ }}=\sum_{i=1}^{n}\left(w_i\ast\mathrm{\ price\ } ratio{Added\ Earnings\ \ i\mathrm{\ }}\right)$

Calculation of NAV for ETH with Added Earnings:

${ETH_\ price_ratio}_{Added\ Earnings}=ETH_\mathrm{\ price_ratio\ }\ast(1+apr/12\ast3)$

Index Calculation:

$index=ETH_\mathrm{\ price_ratio*\ ETH_weight\ +\ Non-}ETH_\mathrm{\ price_ratio*\ Non-ETH_weight}$

Investment Highlights

A. Passive Investment:

The crypto currency market is highly dynamic and characterized by extreme volatility. Price fluctuations are common, and the magnitude of gains and losses can be substantial. While the crypto currency market presents significant potential, it also carries risks. Adopting a passive investment strategy can help mitigate investment risks and balance portfolio returns. It is based on the concept of long-term investing, participating in the overall market movements by holding the Crypto β Index without engaging in frequent buying and selling.

B. Diversified Investment:

The index employs a diversified investment strategy to reduce investment risks and avoid excessive reliance on a single crypto currency. The crypto currency market is highly volatile and risky, and investing in a single crypto currency can expose investors to specific asset risks. Passive diversified investment spreads investments across multiple crypto currency assets, reducing the risk associated with individual crypto currencies and minimizing portfolio volatility.

C. Objectivity in Asset Selection:

For individual investors, it can be challenging to make investment decisions and allocate funds effectively for each crypto currency project. However, as an index strategy, it objectively adjusts the weights of ETH and non-ETH assets based on market data and index rules. It optimizes the portfolio allocation by considering market performance and volatility, providing a systematic approach to investment.

Key Word

Launch Time: The official launch date for trading of this crypto currency project.

Market Cap: The market capitalization of a token represents the total market value of the token. It is calculated by multiplying the circulating supply of the token by its current market price.

$\mathrm{Market\ cap\ }=\mathrm{\ circulating\ supply\ }\times\mathrm{\ Current\ Price}$

Volume：A measure of how much of a cryptocurrency was traded.

Staking Ratio: Staking Ratio refers to the proportion of crypto assets that are used for staking and cannot be sold.

Reward: Annual percentage yield

Staking Market Cap: The ratio of the market value of staked tokens to the total market value.

PE (Price/Earnings):

Based on reward (Annual percentage yield), market capitalization, and staked market value calculation,

$pe=1/\frac{reward\ast\mathrm{\ }marketcap\mathrm{\ }}{staking_ratio\mathrm{\ }}$

Income: Real income from token staking.

Circulating Market Cap: The total market value of a cryptocurrency's circulating supply. It is analogous to the free-float capitalization in the stock market.

Turnover：

$\mathrm{turnover\ }=\mathrm{\ volume\ }/\mathrm{\ circulating\ supply}$