MatrixETF

Oct 14, 2021

7 min read

MatrixETF Index Methodology

Matrix Index Introduction

MatrixETF Index Standard

Fundamental Weighting

Token Economic Model

  • Token needs to have the detailed allocation model
  • The release and supply of initial circulation should be reasonable
  • Tokens needs to be with practical utilities and internal values
  • The amount and location of token holders should be appropriate, there is no mandatory manipulation

Project Development

  • The project must be used on the useful protocol or production, must not have the characteristic of a Ponzi scheme or the purpose of gambling
  • The project must be implemented by a clear roadmap
  • The project must have Github code and be submitted regularly
  • The project must have products(test version or official version) or completed product design
  • The protocol or product must be issued at least 90 days
  • Project ecology and application development
  • The status of protocol and project cannot be bankrupted
  • Market prospect of the project track
  • Current market status and future potential of the project

Protocol Security

  • If the project is audited by the experts or well-known audit institutes to ensure the security of smart contracts and user’s assets
  • Days of smart contract running and amount of trades on-chain, in order to reflect the level of smart contract
  • If the project is with the completed documents and risk mechanism plan. Once there is an accident, the team must alarm the users immediately and provide users with reliable solutions to avoid asset loss
  • Tokens must have enough liquidities in different exchanges

Transaction Risk

  • When market value of token is too small, it’s easy to cause violent fluctuation of token price and the risk of manipulation
  • The fluctuation risk of token price is related with fluctuation of BTC/ETH
  • If the token can be traded smoothly, if the token will be listed on main exchanges, if there are derivatives such as futures, options
  • If the liquidity, average daily trading volume and turnover ratio of token are normal
  • The amounts and locations of token holders

Project Community

  • The project must have canonical community governance process
  • The project should have international communities such as Twitter/telegram/facebook/Medium/Discord
  • The user amount, participating proportion and average daily data of community
  • The project should be with weekly news to release project progress and interactive with community users regularly

Market Capitalization Weighting

Weight Calculation

  • Minimum asset allocation: A minimum limit is set on the percentage of ETF funds that can be allocated to a single asset. This can prevent the use of market capitalization weighting methods resulting in a large number of low-weight assets. (Min ≥ 2%)
  • Maximum asset allocation: that is, a maximum limit is set on the percentage that can be allocated to a single asset in the ETF fund portfolio. This can prevent the use of market capitalization weighting method to cause a single asset to account for too high a situation. (Max ≤ 80%)

MatrixETF Index Rebalance

1.Confirmation

  • If adjust the circulation supply
  • If adjust Token weighted proportions
  • If delete or add new tokens
  • Add the new token information

2. Rebalance

About MatrixETF