Methodology

Our full methodology for the CAI index.

Utility, Supply, Liquidity, Security requirements

Token inclusion criteria

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

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 token should have a Chainlink price feed.
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.

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.
The token must not have locking, minting or other patterns that would significantly disadvantage passive holders.

Liquidity requirements

The token must be listed on a supported exchange.
The token should have in aggregate at least $2M of on-chain liquidity across Trader Joe 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

Idle assets can be a large opportunity cost. CAI minimises this 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.
80% of each asset's reserve will be deposited into its respective Yield Yak vault.

The yield bearing vaults that CAI will utilise must adhere to several key standards:

Returns are 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.

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Last updated 6 months ago

Utility, Supply, Liquidity, Security requirements

Token inclusion criteria

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

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 token should have a Chainlink price feed.

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.

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.

The token must not have locking, minting or other patterns that would significantly disadvantage passive holders.

Liquidity requirements

The token must be listed on a supported exchange.

The token should have in aggregate at least $2M of on-chain liquidity across Trader Joe 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.

Suitability of yield bearing vaults

Idle assets can be a large opportunity cost. CAI minimises this 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.

80% of each asset's reserve will be deposited into its respective Yield Yak vault.

The yield bearing vaults that CAI will utilise must adhere to several key standards:

Returns are 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.