The DeFi Index Marketplace Powered by A.I. (Litepaper V1), by Marshall Chang
We introduce the DeFi IndexZoo, a DeFi Index factory that produces index products to enable different investment strategy exposures to both the general and sophisticated crypto investors. The first two planned DeFi IndexZoo products solve 2 main problems in the DeFi space today. One is the lack of a systematic approach to benefit from the inevitable market downturn. The other is the lack of a tradable volatility product for investors to hedge against short-term risk. The DeFi IndexZoo will fill in these gaps by launching 2 product groups:
The Bear is an inverse ETF product that short the indices tracking DeFi assets, enabling investors to systematically bet against the whole market or its sub-sectors.
The Fear is a VIX index that measures volatility in the DeFi space, and the tracking ETN products that enables investors to speculate on, or hedge against short-term volatility.
The Bear and the Fear will be the IndexZoo’s upcoming products, and each will develop into different groups of products which are customized for different risk/return profiles, timeframe, and active/passive trade-offs.
These are the two frequently used hedges in traditional markets such as the U.S. stock market. They are not currently available neither in cryptocurrency nor the DeFi space. The IndexZoo is created by quantitative traders who are searching for such products while trading the markets.. DeFi Pulse has been well known to the industry as a leaderboard of DeFi. While DeFi Pulse is a great tool to look for statistics such as TVL and market cap, it is not known to the market yet for an index with hedging and shorting functions.In order to achieve the wide adoption of cryptocurrency trading and investing, such infrastructure needs to be in place.
Read further in the pdf version in this repositary.