ETP Defi Index Proposal

Discussion Thread: https://gov.wsbdapp.com/t/etp-defi-index-proposal/605

The Methodology PDF can be found here https://uploads-ssl.webflow.com/60fed6cb6d2ef7a142e50d84/616df9cb3f886e4a343c17a1_Methodology%20WSB%20DeFi%20ETP.pdf

Background:

Bravenewcoin.com 8 has an adopted index: The ‘BNC Blue-Chip DeFi’ index. (https://bravenewcoin.com/data-and-charts/custom-indices/bbdx) WSB has an opportunity to partner with BNC to create a WSB DeFi ETP with ‘exposure parity’ to the Index.

The Assets in this index are both available and liquid on Balancer V2 - this is a prerequisite to manufacturing an ETP and the reason we propose a discussion and vote on the WSB DeFi ETP instead. The WSB Crypto 20 ETP still does not have all 20 assets liquid enough on Balancer V2 and the WSB team wishes to progress with rolling out ETP’s now that the 1st Macro Hedge one has soft-launched and all the ground work is done.

Principal Investment Strategy:

The ETP is a passively-managed exchange-traded portfolio that seeks to achieve its investment objective by investing DeFi protocol tokens to take advantage of the success of their protocol tokens.

This investment strategy spreads out the investment across a number of projects to create a more representative price of the DeFi space. Diversifying into a number of projects allows a more robust strategy when compared to just one protocol token.

Asset Constituents & Weights:

Asset allocation is the process of determining what portions of your portfolio holdings are to be invested in the various asset classes. The below table are the allocated assets for the DeFi ETP, based on the same allocation as the BBDX.

Asset - Weight % UNI - 25.00 AAVE - 21.37 MKR - 13.24 COMP - 10.99 GRT - 10.37 SNX - 6.74 SUSHI - 6.28 YFI - 6.01

The Sector Analysis below summarizes the constituent allocation of the BBDX across 5 sub sectors of the DeFi market sector.

Subsector - Weight % Decentralized Exchanges - 25 Borrowing and Lending - 37.5 Derivatives - 12.5 Data Management - 12.5 Asset Management - 12.5

Portfolio Management & Expense Structure The following table describes the fees and expenses that the Pool will apply to create or redeem units in the ETP. In addition, unit holders may pay other transaction fees, such as network gas fees on deposit and withdrawals of the ETP.

Performance Fee - n/a Swap Fee* - 0.025%

*Unit holders may vote to vary the swap fee rate & the fee split with the DAO from time to time.

A vote “Agree” represents we should move forward with this ETP and will launch it as soon as practical. A vote “Disagree” represents a new proposal should be made based on user feedback on a follow up post and we will refactor our choices.