Bloomberg to Launch DeFi Index Based on Nine Distinct Ventures
Bloomberg and Galaxy Digital Management have extended their cryptocurrency offerings to evaluate the progress of the decentralized finance (DeFi) sector. Bloomberg said on Thursday that it will create an index monitoring nine distinct decentralized finance initiatives in collaboration with Galaxy Digital.
Uniswap (UNI), Aave (AAVE), Maker (MKR), Compound (COMP), Yearn.Finance (YFI), Synthetic (SNX), SushiSwap (SUSHI), 0x (ZXR), and Uma (UMA) were among these initiatives as of August 1.
“Decentralized finance is emerging as the next big investing topic inside crypto,” claimed Alan Campbell, director of product management for Bloomberg’s multi-asset index division.
“As the need for liquidity and institutional custodial product offerings rises, DeFi has turned out to be an increasingly appealing alternative for institutional investors.”
Bloomberg reports that “institutional trading and custody preparedness” as well as “quality of pricing” factored into the DeFi assets’ selection. According to the news source, none of the venture will ever account for less than 1% of the index’s total value, and no greater than 40%.
Galaxy Fund Management, the investment division of Galaxy Digital, will also provide its in-house conservatively managed fund mirroring the progress of Bloomberg’s, which will be represented by the ticker DEFI.
Bloomberg and Galaxy Digital initially collaborated three years ago to establish a joint crypto benchmark index. When it was launched in May 2018, the index monitored 10 cryptocurrencies from the industry’s “biggest, most liquid segment,” that encompassed Bitcoin (BTC) and Ether (ETH) (ETH).
Bloomberg and Galaxy Digital’s latest DeFi index followed the February launch of a DeFi Crypto Index Fund managed by asset manager Bitwise. Though Bitwise claimed 46.4% gains in the previous month, the fund’s net asset value has fallen by 8.6% since its launch.