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Index Coop Glossary
General and specific terminology related to the Index Coop. To assist lookup, acronyms which appear frequently on Index Coop platforms are listed in place of their long-form term.
Automated Market Maker. A type of exchange for trading assets. They are based on liquidity pools and will always find a price and trade. An AMM implemented by smart contract on Ethereum can be decentralized, non-custodial, and permissionless. AMM examples include: Balancer, Loopring, Sushiswap, and Uniswap.
Sometimes shortened to 'arb'. The simultaneous buying and selling of an asset in different markets or in derivative forms in order to take advantage of differing prices. For example, selling at a higher price on one exchange while at the same time buying the same asset on another exchange where the price is lower. This activity is often carried out by bots, especially in established markets.
Assets Under Management. The total market value of assets, such as tokens, held by an entity. For example, the DeFi Pulse Index had over $100m AUM in February 2021. The term is sometimes used to indicate the value of assets invested in an exchange liquidity pool. If the pool assets are not staked to earn yield, this is considered unincentivized AUM.
Centralized Finance. Financial organizations that are governed centrally, such as national and retail banks.
Centralized exchange, such as Binance, Coinbase or Huobi. A CEX is subject to the rules and regulations of where it trades and operates as well as the considerations associated with how it does business.
CoinShares Gold and Cryptoassets Index Lite. An index token for institutional investors launched by CoinShares in association with the Index Coop and Imperial College London. It consists of volatile and non-volatile assets with the aim of leveraging Shannon's Demon to increase wealth.
An abbreviation of cooperative. A cooperative is an autonomous association of people united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned enterprise. https://en.wikipedia.org/wiki/Cooperative
Distributed Autonomous Organisation. Generally refers to a method of management that has rules coded in software and that has decision making which is not centralized or hierarchical. Examples include MakerDAO and Nexus Mutual. The Index Coop is a DAO.
Decentralized Finance. Financial services and applications that are not, or mostly not, controlled centrally, as in Centralized Finance. For example, Uniswap is a decentralized exchange, versus Coinbase which is a centralized exchange.
Decentralized Exchange. A place to swap coins/tokens that is not centrally controlled and which is typically non-custodial and permissionless. For example Balancer, Curve, and Uniswap.
Decision Gate. Points in a process where voting decides if it should continue. For example, to launch a new token through the Index Coop, there must be a community vote on whether to go ahead with development.
Direct message. When contacting someone directly and not in a public group. For example, 'I'll send you the spreadsheet link in a DM'.
Defi Pulse Index, and its token DPI. An index developed by the DeFi Pulse team of the top DeFi project tokens on Ethereum. The DPI token is ERC20 compliant and represents holdings of the top DeFi project tokens that meet the criteria described in their methodology. Token portfolio. To learn more, see DeFi Pulse Index product information.
Directly Responsible Individual. Used for points of contact and project ownership.
Flexible Leverage Index. A novel product from DeFi Pulse that abstracts collateralized debt management into a simple index that is represented as an ERC20 token built on Set Protocol. It enables you to leverage a collateralized debt without having to manage a collateralized debt. To learn more, see Flexible Leverage Index product information.
Metaverse Index. An index designed to capture the trend of entertainment, sports, and business as they transition to a virtual environment. The index is made up of Ethereum-based tokens that represent this metaverse sector. To learn more, read the product information - MVI.
Source of data, such as stock prices. Chainlink is an oracle provider.
Members of the INDEX Coop. Anyone who takes part in the INDEX community is an owl. Gold, Silver, and Bronze Owls have, respectively, higher to lower levels of responsibility. They can be found on the Index Coop Discord channel.
Product/market Fit. Used when discussing how much demand is satisfied by a product. For example, 'Does this index proposal serve the needs of its target market? Is there a strong PMF?'
Profit and Loss. Used in accounting.
Return on investment. A metric that helps evaluate if an activity or proposal is worthwhile.
Smart Contract. A protocol or computer program that enforces a contract. The Ethereum blockchain uses a Turing-complete language and its smart contracts can be highly complex. Learn more about the smart contracts associated with the Index Coop in Technical Resources.
The difference between an expected trade price and that which is executed. For example, large trades can suffer a large amount of slippage if trading through a small liquidity pool. A way for large purchases of DPI to avoid slippage is to mint/issue the token directly.
Most commonly, a contract that runs on, and is enforced by, a blockchain network. The Ethereum blockchain uses a Turing-complete language and its smart contracts can be highly complex. Learn more about the smart contracts associated with the Index Coop in Technical Resources.
A crypto coin that tries to maintain its value. Some match/try to match the price of another asset. For example, DAI is pegged to the US dollar and DIGG the value of BTC. Others may target their own value, such as Ampleforth and RAI. Minting or burning tokens maintains a peg and the amount is determined either algorithmically, for example ESD, or by managing collateralized assets, such as for DAI or USDC. Some stablecoins are managed centrally, such as USDC by Centre or BUSD by Binance, while others, such as DAI from Maker DAO, seek decentralization and use on-chain smart contracts for management.
For Index Coop indexes, the streaming fee is an annualized fee on the total market cap of an Index set that its creator may accrue at any time. For example, an Index set is created with a 2% streaming fee. After 6 months, the creator may claim 1% of the total market cap of the Index set as fees.
Traditional Finance. Relating to finance institutions and processes that are not in the crypto space.
Total Value Locked. A metric used to describe the aggregate value of assets locked in a protocol or protocols. Often used as measure of the assets committed to contracts across the whole DeFi space while AUM is used for assets managed by a single protocol or organization.
A holder of a large amount of a crypto asset. They can typically influence markets with the size of their trades or significantly affect the result of a token-based governance vote.