Request for Comment: Data Economy Index (DATA) Updates

Thank you for the thoughtful comment, @Crypto_Texan ! Glad to hear you like the idea of the DATA index - now, let’s see if we can persuade you that this is the right implementation :grinning:

Kiba and I received feedback in the original Data Economy Index proposal that we should consider wrapped and derivative tokens to include assets like Filecoin, Helium, Arweave, and Akash Network that are not natively ERC-20 tokens.

The Index Coop is clearly already comfortable using wrapped tokens given that we already have two products using Wrapped Bitcoin (WBTC, BED and BTC2x-FLI.

Still, your point is duly noted that we definitely need to further research and understand the trade-offs of using assets like RENFIL backed by RenVM / Ren Protocol before an IIP is submitted.

When I first joined the Index Cooperative, I remember thinking it was very strange that Augur was initially included in DPI and not Numeraire. After careful consideration, I don’t think either belong in that index because they do not fit into either lending (i.e. AAVE, MKR, COMP, KNC, CREAM) or exchange (i.e. UNI, SUSHI, LRC, BAL) categories which currently dominate the DeFi industry and therefore the DeFi Pulse Index.

Numeraire is one the quintessential tokens in the Data Economy category because it’s value comes from incentivizing data scientists to submit models/predictions (i.e. off-chain data providers) based on private, encrypted datasets (off-chain data & data providers) to run the ultimate hedge fund. I do not think Messari or CoinGecko are properly categorizing Numeraire; CoinMarketCap is closer to the mark by categorizing it as AI & Big Data.

For what it’s worth, I was introduced to Crypto through the Numerai competitions in which I competed as a data scientist. NMR was actually the first cryptoasset I ever owned.

I think there is definitely potential for a “Web3” style index at the Index Coop, although that is not what we are trying to achieve with the Data Economy index at this time.

In general, I would be extremely hestitant to rely on categorization from Messari, CoinGecko, CoinMarketCap, etc. for building an index. We used several categories to create an initial group of tokens for consideration in the Data Economy index and then designed a token inclusion criteria that we believe captures the theme we defined.

In my view, a huge part of the value methodologists bring to the Index Coop is category definition. There is massive value in creating and defining a new category, and this is what @Kiba and I have sought to do.

For example, note that DeFi Pulse Index does not rely on CoinGecko or Messari to determine what is a DeFi token/asset/project. The folks at DeFi Pulse had a huge part in defining DeFi as a category (i.e. the TVL metric comes from DeFi Pulse) and they are reaping massive rewards for both themselves and the Index Cooperative as a result.

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