S&P and Pantera have launched a crypto index based on protocol fundamentals. Read the full analysis.
Frequently Asked Questions
Here is a list of FAQs about the SP and Pantera crypto index focused on blockchain protocol fundamentals
BeginnerLevel Questions
1 What exactly is this new SP and Pantera crypto index
Its a new stockmarketstyle index that tracks the performance of a select group of cryptocurrencies Instead of just following the biggest coins by price it picks tokens based on how strong and useful their underlying blockchain technology is
2 How is this different from other crypto indexes
Most indexes focus on market cap or trading volume This one is different because it uses fundamentalsmeaning it looks at things like how active the network is how many developers are building on it and how secure the protocol is
3 Why would I care about fundamentals in crypto
It helps filter out hype A coin might be popular on social media but if its blockchain has low usage or security issues it might be a bad longterm bet This index aims to find the coins with real lasting value
4 Is this index available for me to buy directly
Not directlyyou cant buy a share of the index itself But you can invest in products that track this index The index is the recipe that tells fund managers which coins to buy
Intermediate Advanced Questions
5 What specific fundamentals are they measuring for each protocol
They look at three main areas
Activity Total transaction fees number of active users and volume of decentralized app usage
Security How much money is staked or locked in the network to prevent attacks
Developer Health Number of active developers code updates and community governance participation
6 How often is the index rebalanced and what triggers a coin being removed
It is rebalanced quarterly A coin can be removed if its fundamentals drop significantlyfor example if user activity plummets or a major security flaw is found It can also be removed if it no longer meets minimum liquidity requirements
7 Does this index include Ethereum Solana and Bitcoin
Yes but not automatically Bitcoin might be included based on its massive security and network activity Ethereum and Solana would