Potential for „ETF tokens“ is huge – What projects are there?

DeFi: Potential for „ETF tokens“ is huge – what projects are there?

The US market for Exchange Traded Funds (ETFs) will grow to over $4 trillion in 2019. In global terms, the market is worth more than six trillion dollars. Index tokens for decentralised finance (DeFi) could play a significant role in this market in the future.

The ETF market offers enormous potential for the DeFi sector, where it is currently still largely underrepresented. Between 2005 and 2019 alone, global ETF and ETP by Crypto Cash assets grew from just under $417 billion to over $6,000 billion.
Statista: Development of global ETF assets under management from 2005 to 2019 Statista: Development of global

It is only in the last few months of the Ethereum DeFi industry that tokenised indices have emerged. At the moment, these indices mainly target the decentralised finance sector. There are currently two projects that are leading in the field of „ETF tokens“: Index Coop (INDEX) and PieDAO (DOUGH).

Enormous potential for Ethereum-DeFi

Both projects are decentralised autonomous organisations (DAOs), which are entirely controlled and co-developed by the community. In addition, each project has already launched indices that are managed by the Governance Token INDEX or DOUGH.

The flagship product of Index Coop is the DeFi-Pulse Index (DPI). This is a market capital weighted index that tracks the performance of key Ethereum DeFi tokens.

By and large, DPI is intended to be a kind of ETF for the DeFi space. Here is a brief overview of the current weighting of the DeFi-Pulse index, which contains a total of 11 tokens:

PieDAO also follows a similar principle to Index Coop and has already launched several DeFi-Token indices. At the moment PieDAO has three „ETF tokens“ :

Each „ETF token“ represents a different section of the DeFi-Space and was created jointly by the community. In the future, both Index Coop and PieDAO intend to publish more „ETF tokens“ that represent, for example, the Ethereum NFT industry or the gaming sector.

Index Coop and PieDao want to be the black rock of the crypto space

In addition, many of you are probably familiar with the asset managers Blackrock and Vanguard, the colossal investment firms that offer their clients a wide range of structured financial products (ETFs and mutual funds).

Similar to Blackrock and Vanguard, Index Coop and PieDAO want to become a kind of „DeFi version“ of these gigantic asset managers. The projects focus on the use of DeFi tools and create crypto-exchange traded products. This should enable users to diversify their investments in the Ethereum DeFi sector. ^