Bankless DeFi Innovation Index - March 2022 Rebalance
Hey everyone, here is information regarding the March 2022 rebalance of GMI.
Objective of the Bankless DeFi Innovation Index (GMI):
The Bankless DeFi Innovation Index is a simple composite index launched by the Index Cooperative. The index focuses on high growth, early stage DeFi projects which are not yet considered “blue chip”. GMI produces an optimal weighting via the use of a combination of square-root market cap, relative secondary market liquidity, and relative token dilution/emission scoring.
We made two major changes to the GMI composition this rebalance period. We added Frax Shares (FXS), the governance and utility token of Frax Finance, and removed SPELL, the governance token of Abracadabra.
We feel that FXS is a very strong fit for GMI. The FRAX stablecoin is the sixth-largest by market cap, and is continuing to become more widely adopted and integrated throughout DeFi. We expect the FRAX supply to continue to increase, in turn driving demand for FXS. In addition, we feel that due to its control over gauge emissions, FXS will increasingly become a strategic asset target for DAOs. Furthermore, the FRAX team is outstanding, executing at an incredible pace and has done a great job of building out a strong community of Fraximalists. Due to the high gas costs to make this addition relative to GMI’s current AUM, we are planning to phase FXS in over two rebalancing cycles.
In light of the recent events within the Frog Nation ecosystem, we have decided to remove SPELL from GMI. This was not an easy decision to make, however, given the unique circumstances surrounding the project, we do not feel it is a good fit for GMI both from a risk-adjusted return, and reputational perspective.