Digital Assets Emerging 20 Index
In 2009, bitcoin was born and attracted public attention. Because of its decentralization and many other unique features, bitcoin renovated the concept of digital currency, which arouse worlds reflection on currency problems.
Due to the wide variety of digital assets, and that part of those fluctuates a lot in price, in order to reflect changes in the price of digital assets accurately, we try to put forward the concept of digital assets index, designed to provide cryptocurrency market participants an appropriate market reference indicator.Necessity of programming digital assets index
On the one side, as a new type of asset, digital assets deeply integrated with financial markets in the early years of development, fall into the category of investment products that are easy to access with excellent liquidity. With all of this, digital assets became a tool on assets allocation for many people. On the other side, because of ICO, many companies in blockchain industry could be financed by digital assets, like Ethereum. Then digital assets turned to be a weathervane of the development in blockchain technology related industries.
With the development of blockchain technology related industries, there are more digital assets attended. The price change became more violent and frequent. Thereupon a series of challenges around the industry, like how to help general investors understand asset investment and overall trends scientifically and effectively, how to assist policy makers and industry participants know industry dynamics quickly and efficiently.
Asia Blockchain Foundation (ABF) hope to solve those problems through solving approach of traditional finance marketing index and program scientific digital assets index, and reflect digital assets and the economic developing trend of blockchain industry reasonably. By means of that, ABF wish to provide a valuable reference frame for the whole industry and give participants some reasonable guide.Definition of Digital Assets Index
Digital assets index is a type of weighted compositive price index, using distribution weights to reflect the overall tendency of digital assets market.
According to international conventions, we try to adjust to the basic principles for constituent stock, and made scientific standard and select digital assets samples step by step.
Firstly we confirmed shortlisted digital assets on the basis of marketing acceptability, service life, social concerns, market capitalization and so on.
The first batch of digital assets samples: BTC, ETH, LTC, ETC, DOGE, GAME, XLM, XRP, YBC, BTS, DASH, XEM, ZEC, ANS, QTUM, FCT, DCT, LISK, MAID, IOTA.Method of Calculation
Digital assets index is a comprehensive index evaluating in four aspect of marketing acceptability, service life, social concerns and market capitalization.
How to evaluate marketing acceptability: Through how many mainstream trading exchanges have opened trading of a particular digital assets. 1 exchange for 1 point, 2 exchanges for 2 points, 3 or more for 3 points.
How to evaluate service life: Through how long the block network normally running. Less than half a year for 0, from half a year to 1 year for 1 point, from 1 year to 3 years for 2 points, 3 years or more for 3 points.
How to evaluate social concerns: Through the quantity of retrieved result of mainstream search engines. Less than 1 thousand for 0, from 1 thousand to 100 thousand for 1 point, from 100 thousand to 1 million for 2 points, more than 1 million for 3 points.
How to evaluate market capitalization: refer to data of market capitalization from coinmarketcap.com. No ranking is for 0, ranking below 400 for 1 point, from 100-400 for 2 points, top 100 for 3 points.
Value of digital assets index = marketing acceptability ( score ) + service life ( score ) + social concerns ( score ) + market capitalization ( score ) .Data source:
IOTA bittrex.comMethod of correcting
When there appear changes to the market capitalization except transaction factor, we’ll use “divisor amendment”to correct the original fixed divisor, to keep insure continuity of index.
According to practical situation, if the following situation happens the modification would be applied:
(1)New digital currency brings into the index;
(2)Digital currency exits the index;
(3)Digital currency abnormally increase in circulation;
(4)Daily quantity of currency would be adjusted;
(5)generated a new price.
New digital currency bring into the index:
When a new cryptocurrency’s index gets higher than top 20 of the original currencies ‘index, they will be rearranged according to the scores.
When digital currency exits the index:
When top 20 of the currencies bring into new currencies, then the currencies with lowest scores would be automatically dropped out.
Natural mining adjustment:
Considering particularity of digital currencies, the total quantity of currency always changes all the time. Then index will introduce quantity change for counting it in the unit of day.Value of use
Digital assets index will play a directive effect to assets allocation of digital currency industry. And it will help outside investors especially investors outside the industry to determine the overall trend of digital currency industry assets.