The index is maintained on a quarterly basis (in January, April, July, and October) in two phases: Determination Phase The Determination Phase takes place during the third week of the month. It is the phase when the changes needed for the next reconstitution are determined. Additions and deletions: The tokens being added and deleted from&hellip;&nbsp;Read More &raquo;Ongoing Index Maintenance

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The index value is the spot value of the DeFi Pulse Index and is calculated with the Laspeyres formula which measures price changes against a fixed quantity weight, the weightfactor. Weightfactor (wf): fixed quantity of tokens determined at the most recent Determination Phase from circulating supply and prices that ensure the index is market cap&hellip;&nbsp;Read More &raquo;Index Calculation

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As part of the token inclusion assessment, Scalara considers a wide range of characteristics of the token, the project and the protocol. These criteria can be placed in four groups: Token Descriptive Characteristics Token Supply Characteristics Project Traction Characteristics Protocol User Safety Characteristics

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The DeFi Pulse Index is a digital asset index designed to track the performance of some of the largest protocols in the Decentralized Finance (DeFi) space. DeFi is a blockchain-based implementation of traditional financial services that does not rely on central intermediaries and instead uses smart contracts on blockchains.

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<p>The DeFi Pulse Index methodology underlies the leading index token in the DeFi space that holds over 50% of all assets tracking onchain basket indices.</p>


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<p>The DeFi Pulse Index offers broad and diversified exposure to the DeFi ecosystem built on Ethereum. Its index constituents offer financial services ranging from permissionless banking, decentralized exchanges, derivative platforms to asset management protocols.</p>


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<p><strong>Scalara</strong> announces the results of the <strong>July 2023 rebalance</strong> of the <a href="https://www.scalara.xyz/indices/dpi" target="_blank" rel="noreferrer noopener">DeFi Pulse Index</a>.</p>



<p>The <strong>DeFi Pulse Index</strong> is a digital asset index designed to track the performance of some of the largest protocols in the Decentralized Finance (DeFi) space.</p>



<p>Over the last three months, since the last rebalancing, the DeFi Pulse Index gained <strong>10%</strong>.</p>


<div class="wp-block-image">
<figure class="aligncenter size-full"><img decoding="async" width="387" height="442" src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" data-src="https://matthewd210.sg-host.com/wp-content/uploads/2023/08/image.png" alt="" class="wp-image-1225 lazyload" data-srcset="https://matthewd210.sg-host.com/wp-content/uploads/2023/08/image.png 387w, https://matthewd210.sg-host.com/wp-content/uploads/2023/08/image-263x300.png 263w" sizes="(max-width: 387px) 100vw, 387px" /><noscript><img decoding="async" width="387" height="442" src="https://matthewd210.sg-host.com/wp-content/uploads/2023/08/image.png" alt="" class="wp-image-1225 lazyload" srcset="https://matthewd210.sg-host.com/wp-content/uploads/2023/08/image.png 387w, https://matthewd210.sg-host.com/wp-content/uploads/2023/08/image-263x300.png 263w" sizes="(max-width: 387px) 100vw, 387px" /></noscript><figcaption class="wp-element-caption">Data from Coingecko. July 31, 2023.</figcaption></figure></div>


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<p>Year to date through July, the DeFi Pulse Index returned +46% led by Maker (+139%), Compound (+131%) and Lido (+96%).</p>


<div class="wp-block-image">
<figure class="aligncenter size-full"><img decoding="async" width="800" height="450" src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" data-src="http://matthewd210.sg-host.com/wp-content/uploads/2023/08/newplot.png" alt="" class="wp-image-1226 lazyload" data-srcset="https://matthewd210.sg-host.com/wp-content/uploads/2023/08/newplot.png 800w, https://matthewd210.sg-host.com/wp-content/uploads/2023/08/newplot-300x169.png 300w, https://matthewd210.sg-host.com/wp-content/uploads/2023/08/newplot-768x432.png 768w" sizes="(max-width: 800px) 100vw, 800px" /><noscript><img decoding="async" width="800" height="450" src="http://matthewd210.sg-host.com/wp-content/uploads/2023/08/newplot.png" alt="" class="wp-image-1226 lazyload" srcset="https://matthewd210.sg-host.com/wp-content/uploads/2023/08/newplot.png 800w, https://matthewd210.sg-host.com/wp-content/uploads/2023/08/newplot-300x169.png 300w, https://matthewd210.sg-host.com/wp-content/uploads/2023/08/newplot-768x432.png 768w" sizes="(max-width: 800px) 100vw, 800px" /></noscript><figcaption class="wp-element-caption">Data from Coingecko. July 31, 2023.</figcaption></figure></div>


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<h2 class="wp-block-heading">DeFi Pulse Index rebalance weights</h2>


<div class="wp-block-image">
<figure class="aligncenter size-full"><img decoding="async" width="785" height="317" src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" data-src="https://matthewd210.sg-host.com/wp-content/uploads/2023/08/image-1.png" alt="" class="wp-image-1228 lazyload" data-srcset="https://matthewd210.sg-host.com/wp-content/uploads/2023/08/image-1.png 785w, https://matthewd210.sg-host.com/wp-content/uploads/2023/08/image-1-300x121.png 300w, https://matthewd210.sg-host.com/wp-content/uploads/2023/08/image-1-768x310.png 768w" sizes="(max-width: 785px) 100vw, 785px" /><noscript><img decoding="async" width="785" height="317" src="https://matthewd210.sg-host.com/wp-content/uploads/2023/08/image-1.png" alt="" class="wp-image-1228 lazyload" srcset="https://matthewd210.sg-host.com/wp-content/uploads/2023/08/image-1.png 785w, https://matthewd210.sg-host.com/wp-content/uploads/2023/08/image-1-300x121.png 300w, https://matthewd210.sg-host.com/wp-content/uploads/2023/08/image-1-768x310.png 768w" sizes="(max-width: 785px) 100vw, 785px" /></noscript></figure></div>


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<h2 class="wp-block-heading">Rebalance summary</h2>



<p>The above index weightfactors and weights were calculated using prices and circulating supplies of all 12 constituents as of July 27, 2023.</p>



<p>At the July 2023 index rebalance, <strong>the phasing in of Lido&#8217;s LDO and Rocket Pool&#8217;s RPL that was <a href="https://www.scalara.xyz/blog/april-2023-rebalance-defi-pulse-index">started in April</a> was continued.</strong> Two-thirds of the circulating supply are considered during determination of new weightfactors.<br>In addition, the removal of Loopring due to <strong>decreased relevance of its DeFi service </strong>was started. At this rebalancing only half of the weight is removed.<br>In both cases low liquidity on decentralized exchanges is reason to apply this stepwise approach. It aims to mitigate the market impact of these index changes.<br>Therefore, the DeFi Pulse Index is still composed of 10 constituents.</p>



<p>As a result of the continued addition of LDO and RPL all other constituent weights decrease (except UNI due to its continued 25% capping). The total one-way turnover of the rebalancing is 8.9%</p>



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<p><em>Scalara is dedicated to creating and maintaining indices for a decentralized world.</em></p>


July 2023 Rebalance DeFi Pulse Index


<p><strong>Scalara</strong> announces the results of the <strong>April 2023 rebalance</strong> of the <a href="https://www.scalara.xyz/indices/dpi" target="_blank" rel="noreferrer noopener">DeFi Pulse Index</a>.</p>



<p>The <strong>DeFi Pulse Index</strong> is a digital asset index designed to track the performance of some of the largest protocols in the Decentralized Finance (DeFi) space.</p>



<p>Since its January rebalance three months ago, the DeFi Pulse Index is down <strong>6%</strong>.</p>


<div class="wp-block-image">
<figure class="aligncenter size-full"><img decoding="async" src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" data-src="https://matthewd210.sg-host.com/wp-content/uploads/2023/05/image.png" alt="" class="wp-image-1213 lazyload"/><noscript><img decoding="async" width="484" height="544" src="https://matthewd210.sg-host.com/wp-content/uploads/2023/05/image.png" alt="" class="wp-image-1213 lazyload" srcset="https://matthewd210.sg-host.com/wp-content/uploads/2023/05/image.png 484w, https://matthewd210.sg-host.com/wp-content/uploads/2023/05/image-267x300.png 267w" sizes="(max-width: 484px) 100vw, 484px" /></noscript><figcaption class="wp-element-caption">Data from Coingecko. April 30, 2023.</figcaption></figure></div>


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<p>Year to date through end of April, the DeFi Pulse Index returned +32% led by Loopring (+85%), Synthetix (+70%) and Yearn (+61%).</p>


<div class="wp-block-image">
<figure class="aligncenter size-full is-resized"><img decoding="async" src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" data-src="https://matthewd210.sg-host.com/wp-content/uploads/2023/05/newplot.png" alt="" class="wp-image-1214 lazyload" width="692" height="389"/><noscript><img decoding="async" src="https://matthewd210.sg-host.com/wp-content/uploads/2023/05/newplot.png" alt="" class="wp-image-1214 lazyload" width="692" height="389" srcset="https://matthewd210.sg-host.com/wp-content/uploads/2023/05/newplot.png 800w, https://matthewd210.sg-host.com/wp-content/uploads/2023/05/newplot-300x169.png 300w, https://matthewd210.sg-host.com/wp-content/uploads/2023/05/newplot-768x432.png 768w" sizes="(max-width: 692px) 100vw, 692px" /></noscript><figcaption class="wp-element-caption">Data from Coingecko. April 30, 2023.</figcaption></figure></div>


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<h2 class="wp-block-heading">DeFi Pulse Index rebalance weights</h2>


<div class="wp-block-image">
<figure class="aligncenter size-full"><img decoding="async" src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" data-src="https://matthewd210.sg-host.com/wp-content/uploads/2023/05/image-1.png" alt="" class="wp-image-1217 lazyload"/><noscript><img decoding="async" width="777" height="337" src="https://matthewd210.sg-host.com/wp-content/uploads/2023/05/image-1.png" alt="" class="wp-image-1217 lazyload" srcset="https://matthewd210.sg-host.com/wp-content/uploads/2023/05/image-1.png 777w, https://matthewd210.sg-host.com/wp-content/uploads/2023/05/image-1-300x130.png 300w, https://matthewd210.sg-host.com/wp-content/uploads/2023/05/image-1-768x333.png 768w" sizes="(max-width: 777px) 100vw, 777px" /></noscript></figure></div>


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<h2 class="wp-block-heading">Rebalance summary</h2>



<p>The above index weightfactors and weights were calculated using prices and circulating supplies of all 11 tokens as of April 27, 2023.</p>



<p>At the April 2023 index rebalance, <strong>one token was removed from </strong>and <strong>two new tokens were added to</strong> the DeFi Pulse Index, resulting in now 10 index constituents.<br>SUSHI was removed due to the project’s <strong>decreased usage</strong>: Both from a total value locked (TVL) and trading volume perspective it has been trailing other decentralized exchanges (DEXes). DEXes are a segment that continues to be represented in the DeFi Pulse Index by Uniswap and Balancer. At the same time SUSHI was also the smallest constituent of the index by market cap weight.</p>



<h3 class="wp-block-heading"><strong>A new segment</strong></h3>



<p>The two largest weight changes in the index were the <strong>additions of <a href="https://lido.fi/" target="_blank" rel="noreferrer noopener">Lido</a> (LDO) and <a href="https://rocketpool.net/">Rocket Pool</a> (RPL)</strong>. Both projects offer <strong>liquid staking solutions</strong> that allow users to benefit from the rewards of participating in the proof-of-stake consensus mechanism of the Ethereum blockchain (i.e. Ethereum&#8217;s staking yield) while at the same time remaining liquid by issuing tradable receipts. In mid-April the <a href="https://blog.ethereum.org/2023/03/28/shapella-mainnet-announcement">Shapella upgrade</a> finally enabled stakers to redeem their staked ETH. </p>



<p>Lido and Rocket Pool are the two largest liquid staking protocols with currently $12 billion and $1.5 billion staked respectively. LDO is the <strong>governance token</strong> of the Lido DAO that gives holders the right to vote in governance decisions. RPL is the governance token of the Rocket Pool protocol and can also be used as an <strong>insurance</strong> deposit in the protocol.</p>



<p>In order to reduce the market impact of the index change, both additions are <strong>phased-in</strong>. Therefore, at this rebalance both tokens are only weighted using one third of their market capitalization. As a result of the addition all other constituent weights decrease (except for UNI due to its continued 25% capping). The total one-way turnover of the rebalancing is 15.1%</p>



<h3 class="wp-block-heading"><strong>Diversification</strong></h3>



<p>The DeFi Pulse Index covers several distinct segments of the DeFi ecosystem.</p>



<p>// Learn more: <a href="https://www.scalara.xyz/blog/from-tradfi-to-defi" target="_blank" rel="noreferrer noopener">From TradFi to DeFi</a></p>



<p>With the addition of Lido and Rocket Pool a <strong>third significant segment</strong> is added to the index in addition to exchanging and lending assets. </p>



<ul>
<li>Decentralized Exchanges: 36.4%</li>



<li>Lending &amp; Borrowing: 31.5%</li>



<li>Liquid Staking: 15.0%</li>



<li>Derivatives: 12.6%</li>



<li>Asset Management: 4.5%</li>
</ul>



<p>Furthermore, liquid staking is a financial service that does not have an immediate analogue in the traditional financial world. In the decentralized world, though, <strong>validating transactions is the basis of all network activity</strong>.</p>



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<p><em>Scalara is dedicated to creating and maintaining indices for a decentralized world.</em></p>


April 2023 Rebalance DeFi Pulse Index


<p><strong>Scalara</strong> announces the results of the <strong>January 2023 rebalance</strong> of the DeFi Pulse Index.</p>



<p>The <strong>DeFi Pulse Index</strong> is a digital asset index designed to track the performance of some of the largest protocols in the Decentralized Finance (DeFi) space. Over the last three months, since the last rebalancing, the DeFi Pulse Index returned <strong>92%</strong>.</p>


<div class="wp-block-image">
<figure class="aligncenter size-full"><img decoding="async" src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" data-src="https://matthewd210.sg-host.com/wp-content/uploads/2023/02/image.png" alt="" class="wp-image-1207 lazyload"/><noscript><img decoding="async" width="521" height="579" src="https://matthewd210.sg-host.com/wp-content/uploads/2023/02/image.png" alt="" class="wp-image-1207 lazyload" srcset="https://matthewd210.sg-host.com/wp-content/uploads/2023/02/image.png 521w, https://matthewd210.sg-host.com/wp-content/uploads/2023/02/image-270x300.png 270w" sizes="(max-width: 521px) 100vw, 521px" /></noscript><figcaption class="wp-element-caption">Data from Coingecko. January 31, 2023.</figcaption></figure></div>


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<p>In <strong>2023</strong> alone, the DeFi Pulse Index returned +50% led by Synthetix (+94%), Loopring (+93%) and Compound (+68%).</p>



<p class="has-text-align-center"><img decoding="async" class="lazyload" src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" data-src="https://lh5.googleusercontent.com/Kr723xKKM1OiIqUuF_-PygG6f51dcqEPVhpKO20Rxl7fw9EAclPi0t6kwxKKk5uhe6krD5t9_KyrZv4j-H1uT8B2kfUi4iRgUTBI8yviHDAgpg9uIQXTCceXVTW9AJgWV2yprOQ26uSaBoTjyOSjrDE" width="624" height="371"><noscript><img decoding="async" class="lazyload" src="https://lh5.googleusercontent.com/Kr723xKKM1OiIqUuF_-PygG6f51dcqEPVhpKO20Rxl7fw9EAclPi0t6kwxKKk5uhe6krD5t9_KyrZv4j-H1uT8B2kfUi4iRgUTBI8yviHDAgpg9uIQXTCceXVTW9AJgWV2yprOQ26uSaBoTjyOSjrDE" width="624" height="371"></noscript></p>



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<h2 class="wp-block-heading">DeFi Pulse Index rebalance weights</h2>



<p class="has-text-align-center"><img decoding="async" class="lazyload" width="624" height="256" src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" data-src="https://lh4.googleusercontent.com/baOtZ_uphllF3-BHfK1vncU2wMY0oC3RCRrd29iuLKg0oFYtpNr5AjGENZW_OpGDXx40DT7fh15Ttgd2AakWH6E-2htkestaASvC-d-r5lNTXIbuSLpoALdsTZceKME_RE2hFuGMsiGP2b4LkLDbwaQ"><noscript><img decoding="async" class="lazyload" width="624" height="256" src="https://lh4.googleusercontent.com/baOtZ_uphllF3-BHfK1vncU2wMY0oC3RCRrd29iuLKg0oFYtpNr5AjGENZW_OpGDXx40DT7fh15Ttgd2AakWH6E-2htkestaASvC-d-r5lNTXIbuSLpoALdsTZceKME_RE2hFuGMsiGP2b4LkLDbwaQ"></noscript></p>



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<h2 class="wp-block-heading">Rebalance summary</h2>



<p>The above index weightfactors and weights were calculated using prices and circulating supplies of all constituents as of January 26, 2023.</p>



<p>At the January 2023 index rebalance, <strong>one token was removed</strong> from the DeFi Pulse Index, resulting in 9 index constituents. REN was removed due to the projects’ continued <strong>decreased usage</strong>. At 1.55% as of determination time, REN was also the smallest token by weight in the index.</p>



<p>The two largest weight changes in the index were the capping of UNI and the weight increase of SNX. UNI’s 55% allocation under market cap weighting once again would have breached the allocation limit of 25% for any single constituent. The <a href="https://www.scalara.xyz/blog/methodology-change-defi-pulse-index-introduction-of-flexible-capping">Flexible Capping</a> rule moved its weight half the way from the current index weight to the 25% target to reduce turnover. The added weight in SNX was due to its increased circulating supply.<br>The total one-way turnover of the rebalancing is 3.7%.</p>



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<p><em>Scalara is dedicated to creating and maintaining indices for a decentralized world.</em></p>


January 2023 Rebalance DeFi Pulse Index


<p>Finding anything positive in last year&#8217;s performance is a challenging task. We still give it a try.</p>



<p>2022 was a bad year for <s>DeFi</s> <s>digital assets</s> <s>risk assets</s> almost all asset classes. Record high <strong>inflation</strong> added further headwind to real returns. The <strong>DeFi Pulse Index</strong>, <a href="https://www.scalara.xyz/"><strong>Scalara&#8217;s</strong></a> benchmark for the DeFi sector was no exception. The index fell 80% in dollar terms, compared to a 68% drop in the price of ETH.</p>



<p>The index ended the year with 10 constituents. It started the year with 17 index components but over the course of the year tokens <a href="https://www.scalara.xyz/blog/methodology-change-defi-pulse-index-introduction-of-minimum-weight-requirement"><strong>with a negligible weight were removed</strong></a> or <a href="https://www.scalara.xyz/blog/defi-pulse-index-update-rgt-tribe-merger"><strong>merged</strong></a> or were <a href="https://www.scalara.xyz/blog/defi-pulse-index-update-extraordinary-removal-of-tribe"><strong>delisted</strong></a>.</p>



<p>The best and worst performers of 2022 based on the current constituents are show in the table below. To paint a slightly more rosy picture, returns are based on asset prices denominated in ETH:</p>


<div class="wp-block-image">
<figure class="aligncenter size-full"><img decoding="async" src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" data-src="https://matthewd210.sg-host.com/wp-content/uploads/2023/01/image.png" alt="" class="wp-image-1196 lazyload"/><noscript><img decoding="async" width="494" height="434" src="https://matthewd210.sg-host.com/wp-content/uploads/2023/01/image.png" alt="" class="wp-image-1196 lazyload" srcset="https://matthewd210.sg-host.com/wp-content/uploads/2023/01/image.png 494w, https://matthewd210.sg-host.com/wp-content/uploads/2023/01/image-300x264.png 300w" sizes="(max-width: 494px) 100vw, 494px" /></noscript><figcaption class="wp-element-caption">Returns in ETH. Data source: Coingecko.</figcaption></figure></div>


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<p>The overall annual return does not look good. But how did the index perform <strong>throughout the year</strong>?<br>Surprisingly, within 2022 there were several longer periods of strong positive performance, both in USD and ETH terms. From mid-June to mid-August the DeFi Pulse Index <strong>rallied 107%</strong> slightly outperforming ETH. These gains were lost by end of the year though.</p>


<div class="wp-block-image">
<figure class="aligncenter size-full"><img decoding="async" src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" data-src="https://matthewd210.sg-host.com/wp-content/uploads/2023/01/image002.png" alt="" class="wp-image-1198 lazyload"/><noscript><img decoding="async" width="481" height="285" src="https://matthewd210.sg-host.com/wp-content/uploads/2023/01/image002.png" alt="" class="wp-image-1198 lazyload" srcset="https://matthewd210.sg-host.com/wp-content/uploads/2023/01/image002.png 481w, https://matthewd210.sg-host.com/wp-content/uploads/2023/01/image002-300x178.png 300w" sizes="(max-width: 481px) 100vw, 481px" /></noscript><figcaption class="wp-element-caption">DeFi Pulse Index in USD. 2022. Data source: Coingecko.</figcaption></figure></div>


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<p>When <strong>measuring the DeFi Pulse Index in ETH</strong> there have been times of positive absolute performance as well. From mid-May to mid-July the index <strong>increased by 81% in ETH</strong>.</p>


<div class="wp-block-image">
<figure class="aligncenter size-full"><img decoding="async" src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" data-src="https://matthewd210.sg-host.com/wp-content/uploads/2023/01/image004.png" alt="" class="wp-image-1199 lazyload"/><noscript><img decoding="async" width="481" height="284" src="https://matthewd210.sg-host.com/wp-content/uploads/2023/01/image004.png" alt="" class="wp-image-1199 lazyload" srcset="https://matthewd210.sg-host.com/wp-content/uploads/2023/01/image004.png 481w, https://matthewd210.sg-host.com/wp-content/uploads/2023/01/image004-300x177.png 300w" sizes="(max-width: 481px) 100vw, 481px" /></noscript><figcaption class="wp-element-caption">DeFi Pulse Index in ETH. 2022. Data source: Coingecko.</figcaption></figure></div>


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<p>Lastly, we take a look at correlations as they are the drivers of <a href="https://www.scalara.xyz/blog/why-invest-in-an-index"><strong>diversification</strong></a>. The more uncorrelated two assets are, the greater is the reduction in risk when combining these two assets. The average pairwise correlation based on daily returns in 2022 was 0.67. This is somewhat higher than the average pairwise correlations seen in the S&amp;P 500 that is typically in the order of 0.3 to 0.5.</p>


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<figure class="aligncenter size-full"><img decoding="async" src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" data-src="https://matthewd210.sg-host.com/wp-content/uploads/2023/01/image-1.png" alt="" class="wp-image-1204 lazyload"/><noscript><img decoding="async" width="519" height="296" src="https://matthewd210.sg-host.com/wp-content/uploads/2023/01/image-1.png" alt="" class="wp-image-1204 lazyload" srcset="https://matthewd210.sg-host.com/wp-content/uploads/2023/01/image-1.png 519w, https://matthewd210.sg-host.com/wp-content/uploads/2023/01/image-1-300x171.png 300w" sizes="(max-width: 519px) 100vw, 519px" /></noscript><figcaption class="wp-element-caption">DeFi Pulse Index pairwise correlations. 2022. Data source: Coingecko.</figcaption></figure></div>


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<p>Happy New Year!</p>



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<p><em>Scalara is dedicated to creating and maintaining indices for a decentralized world.</em></p>


DeFi Pulse Index 2022 in Review


<p><strong>Scalara</strong> announces the results of the <strong>October 2022 rebalance</strong> of the DeFi Pulse Index.</p>



<p>The <strong>DeFi Pulse Index</strong> is a digital asset index designed to track the performance of some of the largest protocols in the Decentralized Finance (DeFi) space. Over the last three months the DeFi Pulse Index returned <strong>-20%</strong>.</p>


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<figure class="aligncenter size-full"><img decoding="async" src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" data-src="https://matthewd210.sg-host.com/wp-content/uploads/2022/10/image.png" alt="" class="wp-image-1192 lazyload"/><noscript><img decoding="async" width="453" height="503" src="https://matthewd210.sg-host.com/wp-content/uploads/2022/10/image.png" alt="" class="wp-image-1192 lazyload" srcset="https://matthewd210.sg-host.com/wp-content/uploads/2022/10/image.png 453w, https://matthewd210.sg-host.com/wp-content/uploads/2022/10/image-270x300.png 270w" sizes="(max-width: 453px) 100vw, 453px" /></noscript><figcaption>Coingecko data.</figcaption></figure></div>


<p>On a shorter time scale, just in October, the DeFi Pulse Index returned +8% led by Sushi (+53%), Balancer (+26%) and Maker (+23%).</p>



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<h2 class="wp-block-heading">DeFi Pulse Index rebalance weights</h2>



<p class="has-text-align-center"><img decoding="async" class="lazyload" src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" data-src="https://lh6.googleusercontent.com/ZjBOJ4N_wykqoJlowa7KtYJTkVDzE8c7Sb5c6-tDVLxGPiRI0Uve-_8isceyG6FAHFm2970BOfUaiEQUtBYk2H5UmRenpmt7OpB_HzjB24E7S8igu-UE2H4Z_7DfXBKBPacYZzS1UP-BVgAhoClS2mn63TV5QLlAe2freiY0VtqSYcfnBN_J-py2MA" width="624" height="293"><noscript><img decoding="async" class="lazyload" src="https://lh6.googleusercontent.com/ZjBOJ4N_wykqoJlowa7KtYJTkVDzE8c7Sb5c6-tDVLxGPiRI0Uve-_8isceyG6FAHFm2970BOfUaiEQUtBYk2H5UmRenpmt7OpB_HzjB24E7S8igu-UE2H4Z_7DfXBKBPacYZzS1UP-BVgAhoClS2mn63TV5QLlAe2freiY0VtqSYcfnBN_J-py2MA" width="624" height="293"></noscript></p>



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<h2 class="wp-block-heading">Rebalance summary</h2>



<p>The above index weightfactors and weights were calculated using prices and circulating supplies of all 12 assets as of October 25, 2022.</p>



<p>At the October 2022 index rebalance, <strong>two tokens are removed</strong> from the DeFi Pulse Index while no new tokens are added, resulting in 10 index constituents. Both KNC and BADGER are removed due to their respective projects’ continued <strong>decreased usage</strong>. Coincidentally they are also the two smallest tokens by weight in the index (combined approximately 2%).</p>



<p>For <strong>most constituents</strong> of the DeFi Pulse Index, the index <strong>weight increased marginally </strong>this quarter to make up for the two removals and the capping of UNI. UNI’s 53% allocation under market cap weighting once again would have breached the allocation limit of 25% for any single constituent without any capping. The <a href="https://www.scalara.xyz/blog/methodology-change-defi-pulse-index-introduction-of-flexible-capping">Flexible Capping</a> rule moved its weight half the way from the current index weight to the 25% target to reduce turnover.<br>The total one-way turnover of the rebalancing is 4.5%.</p>



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<p><em>Scalara is dedicated to creating and maintaining indices for a decentralized world.</em></p>


October 2022 Rebalance DeFi Pulse Index


<p><strong>Index providers have rules for every possible capital markets event to accurately represent the underlying economic reality. But how would a TradFi basket index handle a fork?</strong></p>



<p>A group of developers and miners plan to fork the Ethereum blockchain after <a href="https://www.defipulse.com/blog/ethereum-merge-supply-dynamics-primer"><strong>the Merge</strong></a>. This new chain would continue to run a <a href="https://en.wikipedia.org/wiki/Proof_of_work"><strong>proof of work</strong></a> (PoW) algorithm as part of its consensus mechanism. Such a fork will create a new chain on which users will have an amount of &#8220;PoW ETH&#8221; matching their balance on the Proof of Stake (PoS) chain.</p>



<p>The distribution of tokens through the fork closely resembles the TradFi corporate action of a <strong>spin-off</strong>.</p>



<p>According to MSCI&#8217;s <strong><a href="https://www.msci.com/index-methodology" target="_blank" rel="noreferrer noopener">Corporate Events Methodology</a></strong>, <em>a spin-off is the free distribution of shares in a wholly-owned company to the parent company’s existing shareholders.</em></p>



<p>What happens next in the index? Usually an index methodology would not allow the holding of the newly added asset and <strong>remove it</strong> as soon as possible. In order to remove an asset from an index a price is required though. Effectively, the index<strong> “sells” the asset and reinvests the proceeds in the remaining assets</strong> proportionally. Therefore, most index providers&#8217; rules would remove the spin-off company immediately if there is a price available on the effective date (“ex date”) of the spin-off. Otherwise, the index will hold the spin-off until the security starts trading.</p>



<h2 class="wp-block-heading">Index adjustments</h2>



<p>Since any index composition change has to be <strong>self-financing</strong> in total return indices, i.e. money is neither generated nor lost across the removal, the <strong>index divisor is adjusted</strong> (lowered) when the asset is removed:</p>


<p>\[Divisor^{post} = {\sum_{i}p_{i} \cdot s_{i} \over \sum_{i}{p_{i} \cdot s_{i}} + \text{spin-off value}} \cdot Divisor^{pre}\]</p>



<p>Divisor adjustments implicitly distribute the proceeds proportionally across the index.</p>



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<p><em>Scalara is dedicated to creating and maintaining indices for a decentralized world.</em></p>


The index provider’s view on forks


<p><strong>Scalara will end maintenance and publication of the Passive Omnichain Net Yield (PONY) Index.</strong></p>



<p>Note: Scalara does not control any token implementations of its indices. The token contract tracking the index and any bridged versions are created in a completely permissionless fashion. If you have any related questions, please <a href="https://share.hsforms.com/1mLThvHcvTLiD6gWhvgWUIwd1av5">reach out</a>.</p>



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<p><a href="https://www.scalara.xyz/"><em>Scalara</em></a><em>, a subsidiary of </em><a href="https://defipulse.com/"><em>DeFi Pulse</em></a><em>, creates and maintains indices for a decentralized world.</em></p>


Scalara to cease support of PONY Index


<p><strong>Leverage is a powerful tool to amplify the gains (and losses) of a strategy – in this article we explain how it works.</strong></p>



<p>In finance, leverage refers to the concept of borrowing funds to buy assets and thereby have more exposure than the original funds would allow. Of course, the risk of insolvency is amplified as well!</p>



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<h2 class="wp-block-heading">What are leverage indices?</h2>



<p>Leverage indices such as <a href="https://www.scalara.xyz/indices/fli"><strong>Scalara’s Flexible Leverage Indices</strong></a> (FLIs) are designed to seek returns that are a <strong>multiple of an underlying asset’s return</strong>. For example, the ETH 2x Flexible Leverage Index (ETH2x-FLI) aims to return two times the return of the price of ETH. This also means that if the ETH price falls, the leverage index falls even more.</p>



<figure class="wp-block-image size-large"><img decoding="async" src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" data-src="https://matthewd210.sg-host.com/wp-content/uploads/2022/09/image-1024x574.png" alt="" class="wp-image-1145 lazyload"/><noscript><img decoding="async" width="1024" height="574" src="https://matthewd210.sg-host.com/wp-content/uploads/2022/09/image-1024x574.png" alt="" class="wp-image-1145 lazyload" srcset="https://matthewd210.sg-host.com/wp-content/uploads/2022/09/image-1024x574.png 1024w, https://matthewd210.sg-host.com/wp-content/uploads/2022/09/image-300x168.png 300w, https://matthewd210.sg-host.com/wp-content/uploads/2022/09/image-768x431.png 768w, https://matthewd210.sg-host.com/wp-content/uploads/2022/09/image.png 1316w" sizes="(max-width: 1024px) 100vw, 1024px" /></noscript><figcaption>Schematic of single period return of leverage index.</figcaption></figure>



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<p>Intuitively, the leverage index performance can be formulated as:</p>


<p>\[LI_{T+1}=LI_{T} \cdot (1 + L \cdot r_{UL, T+1})\]</p>



<p>where <em>L</em> is the leverage ratio and <em>r<sub>UL</sub>, T+1</em> the return from time <em>T</em> to <em>T+1</em> of the underlying asset.</p>



<p>An alternative representation, that allows for greater insight, tracks the value of the <strong>collateralized debt position</strong> (CDP) that is entered into to generate leverage. The index value is the <strong>net asset value</strong> (<em>NAV</em>) of this CDP.</p>



<figure class="wp-block-image size-large"><img decoding="async" src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" data-src="https://matthewd210.sg-host.com/wp-content/uploads/2022/09/image-1-1024x574.png" alt="" class="wp-image-1151 lazyload"/><noscript><img decoding="async" width="1024" height="574" src="https://matthewd210.sg-host.com/wp-content/uploads/2022/09/image-1-1024x574.png" alt="" class="wp-image-1151 lazyload" srcset="https://matthewd210.sg-host.com/wp-content/uploads/2022/09/image-1-1024x574.png 1024w, https://matthewd210.sg-host.com/wp-content/uploads/2022/09/image-1-300x168.png 300w, https://matthewd210.sg-host.com/wp-content/uploads/2022/09/image-1-768x430.png 768w, https://matthewd210.sg-host.com/wp-content/uploads/2022/09/image-1.png 1315w" sizes="(max-width: 1024px) 100vw, 1024px" /></noscript><figcaption>Leverage index implementation as a CDP with ETH 2x example.</figcaption></figure>



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<p>\[LI_{T+1}=NAV_{CDP, T+1} = Collateral_{T+1} &#8211; Debt_{USD, T+1} = Collateral_{T} \cdot (1 + r_{UL, T+1}) &#8211; Debt_{USD, T}\]</p>



<p>whereby we assume there is no cost to borrow (i.e. the debt balance is unchanged from <em>T</em> to <em>T+1</em>).</p>



<p>This second formula is helpful to understand how the performance of the underlying asset affects the <strong>leverage ratio</strong> (<em>LR</em>) of the CDP over time. The <em>LR</em> of the CDP is the value of the <strong>collateral divided by its NAV</strong>.</p>



<p>After one time period, if the underlying asset&#8217;s price increases, the leverage ratio decreases and vice versa:</p>


<p>\[LR_{T+1} = {Collateral_{T+1} \over NAV_{T+1}} = {Collateral_{T} \over Collateral_{T} &#8211; {Debt_{T} \over 1 + r_{UL, T+1}}}\]</p>



<p>which is less than <em>LR<sub>T</sub></em> if <em>r<sub>UL,T+1</sub> > 0</em> and greater than <em>LR<sub>T</sub></em> if <em>r<sub>UL,T+1</sub> &lt; 0</em>.</p>



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<h2 class="wp-block-heading">Why rebalance?</h2>



<p>As long as this collateralized debt position is left unchanged, the return over the holding period will be as expected: the underlying return multiplied by the leverage ratio at inception of the CDP.</p>



<p>There are two reasons why leverage indices are rebalanced:</p>



<p>Firstly, to <strong>avoid insolvency and liquidation</strong>. Rebalancing to a lower leverage ratio increases the health of the debt position. As we have seen above the leverage ratio increases when the underlying asset&#8217;s price falls.</p>



<p>Secondly, to ensure that the <strong>leverage ratio remains close to the target</strong> leverage. Otherwise, the leverage ratio of the index could deviate significantly from the target leverage depending on the time passed since entering the CDP. Rebalancing will set the LR back to the target leverage so it is providing the expected return (over short holding periods) no matter when a user starts tracking the index.</p>



<p>As we will later see, the tradeoff of this decision to frequently rebalance is that <strong>over longer time periods the leverage index return will not necessarily be close to the the underlying return</strong> <strong>multiplied with the &#8220;advertised&#8221; leverage</strong>.</p>



<p>The following chart shows the performance of a leverage index over <strong>two time periods with rebalancing</strong>. In this example, the index is rebalanced “fully”, i.e. the CDP is adjusted to a leverage ratio of 2 again after the first time period. As a result, during the second time period the leverage index returns two times the underlying return again. The two period return is simply the compounded return <em>(1+r<sub>1</sub>)(1+r<sub>2</sub>)-1</em> (which is clearly not equal to <em>r<sub>1</sub> + r<sub>2</sub></em> !).</p>



<p>In practice this resetting of the leverage ratio is done by either selling collateral assets and repaying debts (if the underlying asset&#8217;s price decreased) or borrowing more and adding to the collateral (if the underlying increased).</p>



<figure class="wp-block-image size-large"><img decoding="async" src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" data-src="https://matthewd210.sg-host.com/wp-content/uploads/2022/09/image-2-1024x266.png" alt="" class="wp-image-1160 lazyload"/><noscript><img decoding="async" width="1024" height="266" src="https://matthewd210.sg-host.com/wp-content/uploads/2022/09/image-2-1024x266.png" alt="" class="wp-image-1160 lazyload" srcset="https://matthewd210.sg-host.com/wp-content/uploads/2022/09/image-2-1024x266.png 1024w, https://matthewd210.sg-host.com/wp-content/uploads/2022/09/image-2-300x78.png 300w, https://matthewd210.sg-host.com/wp-content/uploads/2022/09/image-2-768x199.png 768w, https://matthewd210.sg-host.com/wp-content/uploads/2022/09/image-2.png 1310w" sizes="(max-width: 1024px) 100vw, 1024px" /></noscript><figcaption>Schematic of two period return of leverage index.</figcaption></figure>



<p>We see that while each single period alone returns twice the underlying return of the corresponding period, over both periods together this holds not true. We will answer why in the next section.</p>



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<h2 class="wp-block-heading">What is volatility decay?</h2>



<p>Redrawing the above chart with a smaller return difference between the first and second time period, i.e. <strong>lower volatility</strong> in the underlying asset, shows the impact of volatility on the multiperiod performance of a rebalanced leverage strategy.</p>



<figure class="wp-block-image size-large"><img decoding="async" src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" data-src="https://matthewd210.sg-host.com/wp-content/uploads/2022/09/image-4-1024x271.png" alt="" class="wp-image-1162 lazyload"/><noscript><img decoding="async" width="1024" height="271" src="https://matthewd210.sg-host.com/wp-content/uploads/2022/09/image-4-1024x271.png" alt="" class="wp-image-1162 lazyload" srcset="https://matthewd210.sg-host.com/wp-content/uploads/2022/09/image-4-1024x271.png 1024w, https://matthewd210.sg-host.com/wp-content/uploads/2022/09/image-4-300x79.png 300w, https://matthewd210.sg-host.com/wp-content/uploads/2022/09/image-4-768x203.png 768w, https://matthewd210.sg-host.com/wp-content/uploads/2022/09/image-4.png 1312w" sizes="(max-width: 1024px) 100vw, 1024px" /></noscript><figcaption>Schematic of two period return of leverage index with less volatility in underlying asset.</figcaption></figure>



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<p>By comparing the two charts, we can see that in the first more volatile case the leverage index performed worse in relative terms (<em>8 </em>compared to &#8220;naive&#8221;  <em>2*4.5=9 </em>if not rebalanced). In the second less volatile case the leverage index actually does better than &#8220;expected&#8221; (<em>32</em> compared to <em>2*15.5=31</em>).This <strong>underperformance compared to the un-rebalanced strategy</strong> due to volatility is often referred to as <strong><a href="https://en.wikipedia.org/wiki/Volatility_tax">volatility decay or volatility tax</a></strong>.</p>



<p><strong>There is of course no money stolen or taxed!</strong> As seen above, introducing rebalancing changes the strategy’s leverage &#8220;path&#8221; compared to keeping the CDP unchanged. Every period in the example starts at <em>LR=2</em> if fully rebalanced. On the other hand if the index is not rebalanced the LR is not equal to 2 at beginning of each period.</p>



<p>A more mathematical explanation can be derived from the <a href="https://en.wikipedia.org/wiki/Inequality_of_arithmetic_and_geometric_means">difference between arithmetic and geometric averages</a> but is beyond the scope of this article.</p>



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<h2 class="wp-block-heading">Flexible is better</h2>


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<figure class="aligncenter size-full"><img decoding="async" src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" data-src="https://matthewd210.sg-host.com/wp-content/uploads/2022/09/image-5.png" alt="" class="wp-image-1169 lazyload"/><noscript><img decoding="async" width="80" height="80" src="https://matthewd210.sg-host.com/wp-content/uploads/2022/09/image-5.png" alt="" class="wp-image-1169 lazyload"/></noscript></figure></div>


<p>So far we assumed rebalancing fully back to the target leverage after every time period. This is true for most daily leverage ETFs in traditional finance.</p>



<p><strong>Scalara’s Flexible Leverage Indices</strong> do not fully rebalance to the target leverage at each rebalance though. Instead, as long <strong>as the leverage ratio remains in a band around the target the CDP is only partially adjusted</strong> (e.g. in the case of <a href="https://www.scalara.xyz/indices/fli"><strong>ETH2x-FLI</strong></a>, at each rebalance the CDP is rebalanced to move the LR 5% of the “distance” from its current <em>LR</em> to the target <em>LR</em> of 2). </p>



<p>Since every rebalance requires a swap between borrow asset and collateral asset this flexible algorithm <strong>reduces the overall turnover</strong> (and hence transaction fees).</p>



<p>As a side effect, because the leverage is not set back to its target every time, FLIs may also <strong>closer align with an unrebalanced position</strong> that returns the targeted return multiple over a longer holding period.</p>



<p>This is achieved <strong>without sacrificing safety</strong> since if the <em>LR</em> moves beyond the acceptable band the index is rebalanced back to that upper or lower band level fully. </p>



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<p><strong><a href="https://www.scalara.xyz/indices/fli">Flexible Leverage Indices</a></strong> are implemented as single tokens by the <a href="https://indexcoop.com/products#leverage-inverse-section"><strong>Index Coop</strong></a> and are currently available for ETH, BTC and MATIC. In addition, <a href="https://www.scalara.xyz/blog/launching-inverse-eth-fli"><strong>inverse versions</strong></a> that provide -1x exposure, i.e. increase when markets fall, to these assets are available.</p>



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<p><em>Scalara is dedicated to creating and maintaining indices for a decentralized world.</em></p>


A Practical Guide to (Flexible) Leverage


<p><strong>Scalara</strong> announces a change to the composition of the <strong>DeFi Pulse Index</strong> as a result of the <strong>impending wind-down of Tribe DAO</strong>. On August 26, 2022, TRIBE will be removed from the index.</p>



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<h2 class="wp-block-heading">Background</h2>



<p>On August 19, Fei Labs <a href="https://tribe.fei.money/t/tip-121-proposal-for-the-future-of-the-tribe-dao/4475"><strong>proposed</strong></a> the <strong>shut-down of the Tribe DAO</strong> and a <strong>redemption program</strong> of its TRIBE governance token. Fei Labs is the entity behind the development of Fei Protocol and one of Tribe’s constituent protocols. According to the proposal, TRIBE holders would be able to redeem for a pro rata share of remaining DAO controlled assets after accounting for FEI redemptions as well as compensations for April’s Fuse hack.</p>



<p>In order to ensure the <strong>investability</strong> of the DeFi Pulse Index and <strong>not disadvantage passive holders</strong>, TRIBE is removed from the index.</p>



<p>TRIBE’s price reacted positively to the proposal:</p>



<p class="has-text-align-center"><img decoding="async" class="lazyload" src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" data-src="https://lh5.googleusercontent.com/UJFTPylgvlikLNm2grsRyQYwdpb55XKtPtN_qTFw6mq9NC011yP8jMEdnd6URrVYkvyDlybcIFSB18_nQQwNH6D7Z44_JXB4_y24KSXNjFuhkKnoJTnr6tSKlFMELVEnjJZi53d-sMFMD5lhZFDnRL7RA0yBCpIuvDRNvg_CZ49ONT_uWTNM6bNiig" width="425" height="239"><noscript><img decoding="async" class="lazyload" src="https://lh5.googleusercontent.com/UJFTPylgvlikLNm2grsRyQYwdpb55XKtPtN_qTFw6mq9NC011yP8jMEdnd6URrVYkvyDlybcIFSB18_nQQwNH6D7Z44_JXB4_y24KSXNjFuhkKnoJTnr6tSKlFMELVEnjJZi53d-sMFMD5lhZFDnRL7RA0yBCpIuvDRNvg_CZ49ONT_uWTNM6bNiig" width="425" height="239"></noscript></p>



<p>The DeFi Pulse index currently holds approximately 6.4439 units of TRIBE since the <a href="https://www.scalara.xyz/blog/defi-pulse-index-update-rgt-tribe-merger">conversion of its RGT position</a>. All units of <strong>TRIBE </strong>are <strong>removed </strong>and the corresponding index weight is <strong>redistributed proportionally</strong> across all remaining index components. Circulating supplies are not updated for this extraordinary index update. Token prices as of August 23, 2022 were used.</p>



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<h2 class="wp-block-heading">DeFi Pulse Index weights</h2>



<figure class="wp-block-image size-full"><img decoding="async" src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" data-src="https://matthewd210.sg-host.com/wp-content/uploads/2022/08/image-5.png" alt="" class="wp-image-1132 lazyload"/><noscript><img decoding="async" width="938" height="472" src="https://matthewd210.sg-host.com/wp-content/uploads/2022/08/image-5.png" alt="" class="wp-image-1132 lazyload" srcset="https://matthewd210.sg-host.com/wp-content/uploads/2022/08/image-5.png 938w, https://matthewd210.sg-host.com/wp-content/uploads/2022/08/image-5-300x151.png 300w, https://matthewd210.sg-host.com/wp-content/uploads/2022/08/image-5-768x386.png 768w" sizes="(max-width: 938px) 100vw, 938px" /></noscript></figure>



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<p><em>Scalara is dedicated to creating and maintaining indices for a decentralized world.</em></p>


DeFi Pulse Index Update: Extraordinary Removal of TRIBE


<p>Here at Scalara, we leverage our traditional finance expertise and crypto-native know-how to deliver some of the most innovative index products in the DeFi space.</p>



<p></p>



<h4 id="wp-block-themeisle-blocks-advanced-heading-a6deb206" class="wp-block-themeisle-blocks-advanced-heading wp-block-themeisle-blocks-advanced-heading-a6deb206"><strong>We&#8217;ve developed each index with the investor in mind, and each one addresses a unique need.&nbsp;</strong></h4>



<p>We only include protocols with significant usage and commitment to ongoing maintenance and development. To be included in one of our index products, any related DeFi protocol and corresponding tokens must pass a rigorous screening methodology.&nbsp;</p>



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<p></p>



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<h3 class="wp-block-heading"><strong>The DeFi Pulse Index (DPI)</strong></h3>



<p><strong>Gain exposure to Ethereum&#8217;s blue-chip protocols&nbsp;</strong></p>



<p>The DeFi Pulse Index tracks the performance of blue-chip DeFi protocols offering broad and diversified exposure to the DeFi ecosystem built on Ethereum.<strong><a href="https://www.scalara.xyz/indices/dpi" target="_blank" rel="noreferrer noopener">&nbsp;</a></strong></p>



<p><strong><a href="https://bit.ly/3dwu7P1">Track DPI&#8217;S performance here&gt;</a></strong></p>



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<h3 class="wp-block-heading"><strong>Flexible Leverage Index (FLI)</strong></h3>



<p><strong>Making leverage strategies simple and accessible.&nbsp;</strong></p>



<p>Our FLI implements a collateralized debt position in a controlled and efficient way to achieve leveraged returns. Packaged up into a simple and accessible index.</p>



<p><strong><a href="https://bit.ly/3Psikyy">Track FLI&#8217;s performance here &gt;</a></strong></p>



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<p></p>



<h3 id="wp-block-themeisle-blocks-advanced-heading-eda8c2bf" class="wp-block-themeisle-blocks-advanced-heading wp-block-themeisle-blocks-advanced-heading-eda8c2bf"><strong>Not seeing the index of your dreams? </strong></h3>



<p>Why not speak to us about developing your very own index? We can create and maintain an index that delivers diversified market exposure and provides a powerfully innovative investment solution for your community.</p>



<p><strong><a href="https://share.hsforms.com/1mLThvHcvTLiD6gWhvgWUIwd1av5">Talk to us &gt;</a></strong></p>


DPI

DPI

DPI

DPI

DPI

DPI

DeFi Pulse Index

$63.43

-4.11%

The DeFi Pulse Index tracks the performance of blue-chip DeFi protocols.

The largest DeFi native index

Diversified exposure

News & Research

July 2023 Rebalance DeFi Pulse Index

April 2023 Rebalance DeFi Pulse Index

January 2023 Rebalance DeFi Pulse Index