Introducing the Galactic Blue Index
SPICE DAO presents a new index of “Blue Chip Tokens”, the Galactic Blue Index ($GBI). The GBI tracks the leading crypto / DeFi projects across the industry’s verticals. Here are the details:
What is the $GBI?
The $GBI is a fully collateralised, passive strategy index that tracks some of the biggest large-cap digital assets in the crypto / DeFi value stack in one ERC-20 token.
2020 has seen a staggering rise of interest in the digital asset space, pulling in both institutional and corporate players, but also a swarm of retail investors. With the current explosion of interest in the DeFi ecosystem and gas fees at all-time highs, the $GBI is set up to provide an entry point for investors looking to get a well-diversified exposure to the crypto and DeFi space with a single investment.
Each constitute in the index represents the leading project for each vertical in the crypto / DeFi value chain, giving investors exposure to the full stack, in just one token.
Similar to the $SCIFI index, the $GBI is fully collateralised, meaning that the underlying assets are physically locked into the smart contract. This means that $GBI can always be redeemed for its underlying assets. It can also be minted (created) by anyone by posting the underlying assets into the smart contract (more details below).
The $GBI Constitutes
The $GBI features 7 large-cap digital assets, each of which represents a building block of the DeFi and Crypto ecosystem, as well as $SPICE, the SPICE DAO’s governance token, which acts like a replacement for management fees. The different verticals can be seen as representative of
1. Wrapped Bitcoin ($WBTC)
Wrapped Bitcoin is an ERC-20 token that represents Bitcoin on the Ethereum blockchain. A key advantage of WBTC is its integration into Ethereum smart contracts.
Bitcoin is often seen as analogous to GOLD, given its store-of-value features and its limited supply.
2. Wrapped Ether ($WETH)
WETH (Wrapped Ethereum) is a token that represents an ERC-20 version of ETH on the Ethereum blockchain.
Ether's function as a way of tracking and facilitating transactions is metaphorically closer to a FUEL rather than a currency.
3. MakerDAO ($MKR)
MakerDAO is the organisation that enables the generation of $DAI, the world’s first unbiased currency and leading decentralised stablecoin.
MKR is symbolic in this basket as the token that enables PAYMENTS for the crypto and DeFi ecosystem through its stablecoin DAI.
4. Chainlink ($LINK)
Chainlink is the most widely used oracle network for powering universally connected smart contracts, enabling any blockchain to access to real-world data.
Needless to say, LINK represents the oil of the new age, which is of course: DATA.
5. yearn.finance ($YFI)
Yearn Finance is a group of protocols running on the Ethereum blockchain that allow users to optimise their earnings on crypto assets through lending and trading services.
As $YFI enables the optimisation of asset management, in the GBI basket it represents ASSETS.
6. Uniswap ($UNI)
Uniswap is a decentralised exchange (DEX), facilitating automated transactions between tokens on Ethereum through the use of smart contracts.
Being the largest DEX in the space, Uniswap represents the TRADING vertical.
7. Compound.finance ($COMP)
Compound Finance is an algorithmic, autonomous interest rate protocol built for developers, to unlock a universe of open financial applications.
As Compound Finance enables an infrastructure to create lending services, COMP serves as the representation of the LENDING vertical.
8. SPICE DAO ($SPICE)
SPICE is the governance token of the SPICE DAO. SPICE is included in every index that the SPICE DAO launches, making it possible to launch indices without charging management fees.
A backtesting of the theoretical performance of this basket shows a consistent outperformance of BTC. Backtesting is only possible until the time when SPICE was minted.
How to Access the $GBI Index
This is the contract address of the $GBI: 0xcb67be5c54eab9462967ee3c03c35bfffeb801cd
$GBI can be obtained in one of two ways:
- Market purchase: $GBI is available via Uniswap or any other DEX it might get listed on. Mission Control will also pursue CEX listings, however, this will not be completed immediately.
- Minting $GBI: To do so, you will need to perform a smart contract interaction with a wallet that contains all of the above assets. The details on how this is done can be read in our documentation.
Please take note that there may be a potential tracking error (difference between NAV and token price), especially in the early phase if there is strong initial demand. Mission Control provides initial liquidity pool of ≈280K USDC of $GBI and ≈280K USDC). Anyone can provide further liquidity by minting $GBI (link above).
The $GBI is a passive strategy index. Unlike the actively curated $SCIFI Index, there won’t be a monthly vote on a potential exclusion and addition of tokens. Rather, the rebalancing will be focussed on the weightings of each constitute, as defined by the methodology (mcap driven).
As with all indices launched by SPICE DAO, any idea around methodology changes, weightings additions or exclusions can be submitted and discussed in the DAO channel on Discord. If a proposal sees significant traction, it will be submitted to the DAO council and if it meets the requirements for a DAO vote, it will be formalised on the Snapshot voting tool.
$GBI Methodology Overview
In order to determine the 7 blue-chip constituents, Mission Control evaluates, shortlists and reviews the assets by market capitalisation, duration of project existence and reputation, business continuity planning and safety/audits, as well as on-chain and user activity, to reflect exposure to the main divers of the cryptocurrency market.
SPICE is a permanent constituent asset and has a fixed weighting of 2.5% in order to foster the inclusion of the DeFi ecosystem and enable decentralised index maintenance and governance inclusion.
Each constituent of the $GBI is weighted equally weighted, with the price of the constituent divided by the total number of constituents in the index. Only SPICE is fixed at 2,5%.
The index level for $GBI is calculated by dividing the sum of the current USD price and weightings of all constituent assets by the Divisor and multiplying the result by 100.
$GBI will be reconstituted each time that a new asset is listed on $GBI, in order to allocate the correct weight to each constituent asset and to prevent an artificial increase in the index level. Each reconstitution will occur between the first and the fifth day that the new asset is traded on $GBI. This is designed to reduce the effect of any temporary price volatility in the new asset in the first few trading days after its listing.
For the purpose of portfolio construction, the price for each asset is defined as the moving average price of the last 2 minutes provided by data provider DIA. Prices will be sourced from a variety of crypto asset exchanges as detailed in section 5 of the methodology document.
If trading is suspended for any reason, $GBI will continue to be calculated based on the last traded price before trading was suspended. $GBI will be calculated based on new traded prices once trading commences again.
The supply of each constituent asset is defined as the total number of units that have been created since the first block on the asset’s blockchain, adjusted by stated and/or validated burned, frozen or non-spendable coins/tokens and free-float adjustments.
Supply is mostly measured directly by querying a full node running on the blockchain of each constituent asset, maintained by our data. Further details can be found in section 5 of the methodology.
Unlike traditional assets, for digital assets it is difficult to objectively determine the number of units actually available for purchase by investors, because there is no record of the identity of the owners or holders of each asset. Therefore, it is difficult to determine whether or not any particular unit of an asset is available for trading. For example, the private keys corresponding to the public address of those units could be lost or destroyed, meaning that these units are not available for trading. Therefore, $GBI reflects total circulating supply with verifiable, published adjustments.
The full index methodology can be studied here.