What is Defi Pulse Index (DPI) Token?

Defi Pulse Index (DPI) is a decentralized finance (DeFi) token that tracks the performance of decentralized financial assets across the market. It serves as a capitalization-weighted index. By paying a management fee of 0.95%, you can purchase 1 DPI token for $83.45 as of January 22, 2023, and effectively own a share of the index, which is equally distributed among 10 DeFi products: Uniswap, Aave, Maker, Synthetix, Loopring, Compound, Balancer, Sushi, Yearn, and REN.

Defi Pulse Index

Defi Pulse Index is a digital asset index designed to monitor the performance of tokens within the decentralized finance industry. The index weights each token based on its circulating supply. The purpose of the DeFi Pulse Index is to track projects that demonstrate continuous commitment to maintenance and development and hold significant utility in the DeFi space.

Inclusion Criteria for Tokens in the Index

The DeFi Pulse Index employs a four-dimensional collection of criteria for including tokens in the index. These dimensions cover token characteristics, project features, token supply properties, and project appeal features.

Token Identifying Features

• Must exist on the Ethereum blockchain.
• Should be associated with a decentralized finance protocol or dapp listed on DeFi Pulse.
• The token should not be recognized as a security and must function as a carrier instrument.

Supply Properties

• The token's supply should be reasonably predictable for the next five years.
• At least 5% of the five-year supply should be in circulation.

Appeal Features

• Projects should be considered to have created widely beneficial protocols or products.
• The protocol or project must have been launched at least 180 days ago.
• The protocol should not have experienced a failure.

Security Features

• The protocol should undergo scrutiny by security experts.
• In the event of a security incident, the team must promptly intervene and transparently address the issue.

Index Calculation

The index value represents the spot value of the index and is based on circulating supply, price, and index divisor. The index undergoes maintenance every three months in two stages: determination and dilution. Circulating supply is determined using a source referenced from CoinGecko.

The comprehensive criteria and regularly updated nature of the DeFi Pulse Index make it a tool for monitoring the performance of significant projects in the DeFi space, providing investors with diversification opportunities.