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Methodology

Our full methodology for the CAI index.

Token inclusion criteria

Any token included in our index must meet all the criteria below:

Project and token characteristics

  • The project’s token should have been listed on CoinGecko with pricing data at least 6 months prior to the date of inclusion in the index.
  • The project should have a token that is native to Avalanche. This excludes wrapped variants, where the underlying tokens are locked on an alt-L1.
  • The project should be a going concern, with a dedicated team actively building, supporting and maintaining the project.
  • No rebasing or deflationary tokens.
  • The project must be widely considered to be building a useful protocol or product. Projects that have ponzi characteristics at the core of their offering will not be considered.
  • Synthetic tokens which derive their value from external price feeds are not permissible.
  • The project’s token must not have the ability to pause token transfers.
  • The project’s protocol or product must have significant usage.

Pricing requirements

  • Token should have a Chainlink price feed to allow for manipulation resistant pricing.

Token Supply requirements

  • The project's token must have a circulating supply greater than 30% of the max supply. In cases where a token does not have a max supply, the minting mechanics would need to be assessed.

Liquidity Requirements

  • The token must be listed on a supported exchange.
  • The token should have in aggregate at least $2mm of onchain liquidity across Trader Joe, Platypus and Pangolin.
  • The token must have shown consistent DeFi liquidity on Avalanche.

Security Requirements

  • The project must have been audited by smart contract security professionals with the audit report(s) publicly available. Alternatively, the protocol must have been operating long enough to create a consensus about its safety in the decentralised finance community.

Defining asset weights

  • Assets are weighted according to their circulating market capitalisation as calculated on Coingecko.
  • The maximum weight any one token can have is 50%. All excess weight is proportionally redistributed to all uncapped tokens.
  • Any asset with a weight below 0.5% will be removed from the index.

Suitability of yield bearing vaults

CAI removes the opportunity cost of holding idle assets by depositing a portion of each asset into yield bearing vaults on Yield Yak.
  • Each asset will support exactly one Yield Yak vault, unless one does not exist for that asset or the vault doesn't meet our criteria.
  • 20% of each asset's reserve will be deposited into its respective Yield Yak vault.
The yield bearing vaults that CAI utilises must adhere to several key standards:
  • Returns should not impacted by impermanent loss.
  • The underlying protocol through which yield is generated must pass our security assessment. These include security audits, time in the market and significant usage, amongst others.
  • Where leverage is used, it must be deemed low risk through the lending and borrowing of the same asset.
  • Funds held by the vault must always be redeemable without lockups.
  • Not impose any deposit fees or withdrawal fees.

Index maintenance

Rebalancing

Rebalancing - Occurs on the first business day of each month according to the weighting methodology used for the index. The new assets and weights are determined on the last Wednesday of each month.

Automated management

Phuture handles all index management from rebalancing to allocating and tracking funds in yield bearing vaults.

Investment cycles

24/7, immediately. You never have to wait for your money to be invested.

Redemptions

24/7, immediately. Your funds are easily accessible whenever you need them.