DeFi MTK FACT SHEET
Introduction
The DeFi Index is a curated selection of top projects by Market Cap
built on the Cardano blockchain. This instrument exposes investors to a diversified range of projects within the Cardano ecosystem, offering the potential for growth and innovation in the decentralized finance (DeFi) space.
Strategy
The DeFi Index is a Fixed-weighted index tracking market cap, rebalanced on every transaction made on the Metera Platform to maintain the target allocation percentages. Rebalancing ensures that the instrument reflects the evolving dynamics of the Cardano ecosystem and captures emerging opportunities while managing risk.
Themed DeFi Index
What is an MTK with Fixed Weighting
A fixed-weighted index is an investment strategy where the asset allocation is predetermined and remains constant over time. Each asset or asset class in the instrument has a specific weight (percentage of the total investment), which does not change regardless of market fluctuations.
Key Characteristics
- Static Allocation: The weights of each asset are set initially and do not adjust in response to market changes;
- Long-Term Focus: Generally designed for long-term investing rather than frequent trading.
Advantages
- Simplicity: Easy to understand and manage since there’s no need for constant changes in the weight of the assets.
- Predictability: Investors know their exposure to different asset classes, which helps in risk management.
- Reduced Transaction Costs: Fewer trades mean lower fees and reduced tax implications.
- Discipline: Encourages a long-term investment approach, potentially reducing emotional decision-making.
- Consistent Strategy: This can help investors stick to a predefined strategy, avoiding reactive changes based on market conditions.
Disadvantages
- Lack of Flexibility: Doesn’t allow for adjustments based on market performance or changing economic conditions.
- Rebalancing Needs: Over time, the weights may drift from the original allocation, requiring periodic rebalancing.
Adding Xerberus Ratings
Adding Xerberus, a Risk Rating Oracle to our MTKs means implementing fairness and accountability. They provide a security mechanism offering:
- Objectivity: on the Analysis of the assets in our Indexes.
- Transparency: All Risk Ratings are publicly available, as well as their methodology of rating, assuring that their system is trustworthy.
- Verifiability: A user must be able to verify that a published rating is temper- free. This is achieved by providing proof of the computation and creating a decentralized system in which no single computation provider can assign a rating.
For more information, please visit: https://home.xerberus.io/protocol
- What is Xerberus? Risk Rating Oracle provides risk assessment that users and smart contracts can read.
- How does it work? Xerberus employs a category system reminiscent of traditional ratings, that goes from AAA to D. Additionally, it provides statistical data, including the probability of default. Users can use a policy ID to query the system to get a risk rating for any blockchain asset. It can be accessed at no cost.
Index Composition*
MIN: Xerberus Risk Rating AAA
Description: Minswap is a multi-pool decentralized exchange on Cardano.
LQ: Xerberus Risk Rating A
Description: An open-source, algorithmic and non-custodial interest rate protocol built for lenders, borrowers and developers.
LENFI: Xerberus Risk Rating A
Description: Lenfi is crypto assets lending platform. Smart contract allows to deposit assets andcollect interests or borrow assets and perform financial actions.
INDY: Xerberus Risk Rating BBB
Description: An algorithmic, autonomous synthetics protocol for on-chain price
exposure to real-world assets.
HUNT: Xerberus Risk Rating BBB
Description: Cardano DEX Aggregator for Optimal DeFi Trading.
SUNDAE: Xerberus Risk Rating AA
Description: SundaeSwap is a decentralized exchange built for the Cardano
blockchain. It allows participants of the blockchain to provide liquidity and create a market forothers to exchange their native tokens.
FLDT: Xerberus Risk Rating BBB
Description: DeFi lending platform where borrowers can offer their most valuable NFTsas collateral to borrow cryptocurrency that can be reinvested and repaid under the requirements agreed by both parties.
*Risk rating based on January 21st, 2025.
Risk Considerations
Investing in cryptocurrencies, including those built on the Cardano blockchain, carries inherent risks including price volatility, regulatory uncertainty, and technological vulnerabilities. Investors should carefully assess their risk tolerance and consider diversification strategies.
Disclaimer
This fact sheet is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Investors should conduct their own research and/or consult with a qualified financial advisor before making investment decisions.
Contact Information
For inquiries or further information, please contact the Metera Protocol Team on X @meteraprotocol
