This proposal is due to appear on Snapshot on Monday 5th April, 1pm UTC. Make sure to stake your vBNT for voting before this date and time to participate in the DAO decision.
This proposal is part of the general proposal to whitelist Indexed Finance indices. The parent document can be found here.
DEGEN is the first index originating from our Sigma Program aimed at deploying new indices at faster pace and without going through governance. The Sigma committee is a 3 / 5 Gnosis multi-sig that can deploy new indices and allocate rewards for their staking pools. The signers were elected by the community.
As the name implies, the DEGEN Index aims to seek out alpha via higher risk/reward emerging projects with exceptionally high growth potential, predominantly in the DeFi sector. Candidate members have strong communities and large total addressable markets, with circulating market capitalisations ranging from US$50 million to US$2 billion. If any constituent tokens fall out of these bounds, they will be replaced via periodic re-indexing by the largest market cap tokens drawn from a list of alternatives. In this way, the index will constantly evolve to capture upside from tokens during their most rapid growth phases.
It consists of smaller cap token projects which have more growth potential but also more financial risk.
RUNE ($1.2b), 24h trading volume:$51,636,331
REN ($4.5b), 24h trading volume: $341,614,509
RSR ($1b), 24h trading volume: $341,614,509
CRV ($656m), 24h trading volume: $143,302,744
1nch ($636m), 24h trading volume: $289,894,692
OCEAN ($615), 24h trading volume: $183,133,749
ALPHA ($481m), 24h trading volume: $179,327,526
BADGER ($297m), 24h trading volume: $34,776,763
POLS ($240m), 24h trading volume: $80,034,989
MIR ($350m), 24h trading volume: $22,914,635
Like all core indices the underlying tokens represented by the DEGEN tokens sit in a liquidity pool and re-balance automatically based on the market caps of the underlying tokens. A controller contract fetches the market capitalization of each token from a Uniswap price oracle and submits new target weights to the index pool based on a capitalization-rooted weighting algorithm.
DEGEN tokens are actually LP tokens that represent a share in the AMM pool. They can be redeemed at all times against the underlying tokens in the pool or sold on a decentralized exchange provided there is sufficient liquidity.
The only difference between Sigma indices and core indices is that they have a circuit breaker mechanism. The committee can enable and disable swaps between assets in the $DEGEN](https://twitter.com/search?q=%24DEGEN&src=cashtag_click) pool via a ‘circuit breaker’ in the event of a vulnerability in one of the constituent tokens. This is to protect the pool from being drained if one token goes to zero. Swaps being disabled don’t freeze anything: this just prevents weightings from being adjusted towards target weightings. Holders can still burn $DEGEN tokens back to their underlyings if the circuit breaker is enabled.
DEGEN contract address: 0x126c121f99e1e211df2e5f8de2d96fa36647c855
The Index Pool contract is a fork of the Balancer Pool. The primary changes made to the contract were to enable more dynamic pool management so that assets can be bound, rebound and reweighed gradually and without the need to access external liquidity.
These changes have been audited by two independent security experts: Daniel Luca, a former auditor for Consensys diligence, and Mudit Gupta, the lead blockchain engineer at Polymath.
- DEGEN market cap: $7.4m
- TVL in the DEFI5 pool: $5.6m
- 24h volume: $485K
- 24h fees: $1457