DeFi Pulse IndexPrice

(DPI)

The DeFi Pulse Index, commonly known by its token symbol DPI, is a decentralized financial instrument designed to provide broad exposure to the decentralized finance sector on the Ethereum blockchain. Launched in September 2020, it was created through a collaboration between the analytics platform DeFi Pulse and the Index Cooperative, which is a decentralized autonomous organization or DAO. The technical implementation of the index is supported by the Set Protocol. The primary purpose of DPI is to act as a structured product that tracks a basket of prominent DeFi tokens. By holding a single ERC-20 token, users gain a diversified position in various leading protocols without needing to purchase or manage each individual asset. This approach is intended to simplify the user experience and reduce the technical complexities often associated with navigating multiple DeFi platforms. The index follows a specific methodology for selecting and weighting its components. To be included, a token must be a native Ethereum asset and cannot be a synthetic or wrapped version of another asset. The project associated with the token must have a functional application, show significant usage, and demonstrate a commitment to ongoing development. Additionally, projects must meet safety standards, such as having undergone professional security audits or having a long-standing history of operation without security incidents. DPI is a capitalization-weighted index. This means the weight of each component in the basket is determined by its relative size in the ecosystem. To prevent any single project from dominating the index, a cap is placed on the maximum weight a single token can hold. This ensures the index remains diversified across various sectors of the DeFi industry, such as lending protocols, decentralized exchanges, and yield aggregators. The Index Cooperative DAO is responsible for the ongoing maintenance and governance of the product. The community of token holders within the DAO votes on proposals regarding the index's composition and methodology. Rebalancing typically occurs on a quarterly basis to account for changes in the industry, ensuring that the index continues to reflect the most established and active projects in the space. Beyond being a tool for diversification, DPI is often used as a productive asset within the broader Web3 ecosystem. It can be utilized as collateral in various lending and borrowing platforms or integrated into other decentralized applications to provide liquidity. This utility allows users to maintain their exposure to the DeFi sector while participating in other functional activities across different blockchain protocols. Learn more

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