Last month I discovered Index Coop and I was impressed by the amazing community-led decentralized organization that creates state of the art crypto indices. A Crypto Index is a selection of cryptocurrencies, grouped by market cap, which will gain value when the coin or token gains value.
The Index Coop flagship product is DeFi Pulse, a Decentralized Finance index of 11 popular Ethereum DeFi tokens.
The index pool contains AAVE, Synthetix (SNX), Uniswap (UNI), Yearn Finance, Compound (COMP), Maker (MKR), REN, Loopring (LRC), Kyber Network, Balancer and the newly added Sushi. By their power combined ... they created DPI.
DeFi Pulse Index was launched back in September 2020 and filled a gap in the DeFi ecosystem by offering the product that pulverized the knowledge barrier for crypto investors. Investors with low DeFi knowledge can invest in DeFi Pulse and gain exposure to multiple tokens through the ownership of a single token. To make it easier for non-crypto investors, DPI is like adding all the Infinity Stones on the Gauntlet and showing off the absolute power.
Drum roll please... for the Flexible Leverage Index (FLI)
The Flexible Leverage Index (FLI) is the new product launched by The Index Coop, in collaboration with Pulse Inc. The FLI is structured as an ERC-20 token that enables investors to automate a target leveraged exposure with all the advantages of decentralization, which will reduce the risk and costs of collagenized debt. FLI rebalances the leverage position for investors and doesn't need constant monitoring. FLI is perfectly balanced ...as all things should be!
I have to fears when I am playing with DeFi, impairment losses and leverage, with the second being so hard to understand. The Leverage is similar to Thanos finger snap, as half of the assets can vanish in a split second. In this DeFi battle, the Flexible Leverage Index was created to reduce the risk by making the use of leverage safer and simplified. The Flexible Leverage Index will replaces the Avengers and will stop the Leverage finger snap, saving the DeFi ecosystem. FLI is easy to use, can lower the gas fees and can decrease the risk ... that's really the Endgame!
The Leverage risk is reduced automatically by FLI by maintaining target ratios and absorbing major volatility spikes. The collateral levels will stay above liquidation thresholds with the help of flexible rebalances and an emergency de-levering mechanism in case of a black swan event, an unpredictable event that is beyond the normality of of the situation which can have severe consequences.
The Flexible Leverage Index is unique as it was created as the world's first fully-collateralized leverage token that can be redeemed into Ethereum and USDC, the Index components. The fees are reduced with the help of an algorithm that can increase rebalancing efficiency by an order of magnitude, which takes the pressure from investors. The FLI steaming fee, annualized at 1.95%, is much lower than other alternatives from CeFi exchanges, and no slippage is happening as direct result of composable deposits and withdrawals. Can be bought from Uniswap and for non-US residents from TokenSets.
The FLI Methodology
The Flexible Leverage Index (FLI) can have a wide use case as a fully collaterized ERC-20 token and can be integrated in various services. Ethereum is the underlying asset of the index, and the target leverage ratio is 2, fluctuating between 1.7 and 2.3 leverage ratio. The Compound DeFi lending protocol has a re-centering speed set at 5%. A full methodology can be found on Pulse Medium. The Flexible Leverage Token (FLI) its offering the right DeFi favours.
Why Index Coop is different?
I joined the community and no day was boring in the Index Coop Discord channel. I learned a lot and I found answers for every question I had. The projects of the future are created today, while considering sustainability and innovation
DeFi bounty at CakeDeFi with $30 DFI for new users