The index becomes a new track for entrepreneurship. Can it be born to MSCI that belongs to the blockchain pass market? 丨Babbit observation

In recent years, in addition to the exchanges that are the easiest to attract gold, we have seen more and more entrepreneurs put their entry points into market segments, investment tools, wallets, aggregate transactions and other sub-segments. Batch star start-up projects, such as the block trading platform previously reported by Babbitt, the digital asset brokerage system service provider Hong Kong Sheng Technology , the market information tool currency cow cattle , the wallet tool Hufu wallet and so on. The addition of these new roles is constantly improving the infrastructure of the blockchain market.

These products are easy for users to see. In fact, there is a very basic but important role that is easily overlooked, that is, the rapidly changing market index. The index is of great value and has functions such as portraying the market, reflecting the average market return, developing derivatives, and risk management. In the mature stock market, the index is an important indicator for investors to analyze stock market dynamics and determine investment. The index is even a “barometer” that reflects the economic development strength of a country.

At present, the players on the blockchain pass market index track have begun to take shape.

According to Babbitt's observations, dozens of teams have launched specialized market indices, with participants including exchanges, third-party rating agencies, investment institutions, and specialized index teams. The well-known comprehensive index and value index launched by Babbitt, the market 10 index launched by Bitcoin, the scale index launched by ChaiNext, and the index launched by the two exchanges of Firecoin and OK.

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However, it is undeniable that the current index market is mixed, the index calculation methods are various, the data source is too small, and the stability is poor, which causes trouble for investors.

Founded in June 2018, ChaiNext, after seeing the value of the index market and the pain points, joined the index track with the role of blockchain and quotation market index and investment analysis tool provider. In the more than one year since its establishment, ChaiNext has compiled a series of indices such as scale index, price benchmark index and sentiment index, and established cooperation with Cobo, QKL123 , AiCoin, Tiger Contract Cloud, CCFOX, Coin Cattle, MyToken, etc. Relatively fast.

The business value of the index needs to be discovered, and the industry is not good.

The index is a universal financial language that plays a fundamental and important role in the field of financial investment.

First, the index has the role of portraying the market . For example, the US stock market has the Dow Jones Industrial Average and the S&P 500 index. The Chinese stock market has the Shanghai Composite Index and the Shenzhen Stock Exchange Index. Secondly, the index reflects the average market return , so it can be used as a performance benchmark for active managers and investors to compare and evaluate performance. Once again, the index is a diversified investment target that can be tracked by products such as index funds and ETFs. Finally, based on the index, it is also possible to develop relevant derivatives to provide risk hedging and arbitrage tools for the market.

Therefore, the index has not only a basic but important role, but also a huge commercial value space.

At present, there are more than 3,000 certificates in the digital token market, and the overall market value has increased from $10 billion at the end of 2013 to $260 billion. There are a certain number of index products in the market, but there are various defects in the technical level and the programming level, which can not meet the basic needs of the market for the index, including:

(1) The index system is not perfect. Only a single currency index, or only a large-cap index, can not reflect market performance from micro and macro; (2) the frequency of index issuance is low, continuity is poor, and there is no intraday reference; (3) the market source is too small. Some indexes are developed based on market data of 1-5 exchanges. Index points are susceptible to manipulation or are affected by abnormal market conditions. They are not representative of price. The risk of delisting of derivatives based on such indices is relatively high; 4) The preparation plan is not rigorous and objective. The lack of design for the characteristics of the digital token market makes the index component unreasonable; (5) insufficient investigation of sample liquidity, can not guarantee investmentability; (6) There are problems with the weighting method. For example, the weighting method is too subjective, can not objectively reflect the market trend, can not guarantee the market representation and investment capacity of the index; (7) lack of abnormal market processing mechanism and disaster recovery plan, the index release stability is poor; (8) the calculation method in the preparation plan There are obvious errors that cause the index to be distorted.

In response to industry pains, ChaiNext will use the index as a breakthrough.

Can a traditional financial institution enter the market and the blockchain pass market can give birth to MSCI?

ChaiNext's entrepreneurial team is born in the traditional financial industry. It has accumulated many years of expertise and experience in securities trading and index research and development. At the same time, it also pays attention to the blockchain field. This composite background gives the team the ability to build a complete "industrial" index system .

The so-called industrial-grade index system means that it can support large-scale, standardized products that need to meet the following requirements:

(1) The delay should be low. The index is a barometer reflecting the overall trend of the market, so it must be timely. (2) The representativeness is strong. The index reflects the overall trend of the broader market, so it should cover the representative currency in the market. (3) The system should be complete. The demand for products is often varied, and the demand for indices is not limited to one or two, but a series or even multiple series. (4) High availability. The index cannot be down and cannot be broken.

The ChaiNext scale index has a delay frequency of no more than 3s, and has released 13 scale indices with a market capitalization coverage of 96%. From data capture to index calculation and release, all are high-availability designs.

In the light of the law, ChaiNext's ultimate goal is to become the MSCI of the blockchain certification market. MSCI is the abbreviation of Morgan Stanley Capital International, the world's largest indexing company. Its MSCI index is the most used benchmark index for global portfolio managers and has become an important benchmark for measuring the performance of capital markets in various countries. . As early as 2015, the MSCI index based assets exceeded $10 trillion. Of the world's top 100 largest asset managers, 97 were MSCI customers, and 95% of US investment equity pensions were based on MSCI. .

The traditional securities market is very mature and the demand for the index is very large, which is the basis for companies such as MSCI to form the current scale.

At present, the digital token market is still in the early stage of development, and there is still a gap between the demand for the index and the traditional market. However, more and more traditional financial institutions have begun to intervene, and Nasdaq, CME, and Bloomberg terminals have been linked to Bitcoin. Index, Coinbase launched index funds. The most direct way for traditional machine investors to enter the market is to invest in passive index funds, and even directly use the index as a benchmark to build a passive combination. For example, the world's largest fund, BlackRock, mainly focuses on passive investment.

User groups are gradually expanding, can index funds detonate the market?

The value of the ChaiNext Index is also recognized by more and more market participants.

For example, large market information providers such as QKL123, Aicoin, Mytoken, and Coin Bulls use the ChaiNext Index to provide users with reference information for transactions. For derivatives exchanges such as Tiger Contract Cloud and CCFOX, the ChaiNext index system can be used to develop derivatives such as futures and options.

In addition, ordinary investors can use the ChaiNext Index as a benchmark for performance comparisons to build index funds and test portfolios. Professional investors can use the ChaiNext index and data services to develop test investment planning and arbitrage strategies. Passive investment managers can also develop products such as funds or ETFs that track the ChaiNext index.

Just last week, Cobo Wallet and ChaiNext reached a cooperation, will soon launch the industry's first digital currency index fund : ChaiNext-Qiyu Index Fund. Among them, the index is prepared by ChaiNext, the fund custodian is Cobo, and the fund manager is Kai.

It is understood that the index fund products will be ChaiNext 5 and ChaiNext 5X in the ChaiNext scale index as the investment target. The ChaiNext 5 Index consists of the five largest tokens in the token market with the best liquidity, reflecting the price movements of the oversized currency in the token market. The ChaiNext 5X index consists of the ChaiNext 5 index sample, which excludes bitcoin, reflecting the price movement of the oversized currency in the token market other than Bitcoin. The two can form a good complement, and at this time the price of ETH, LTC and other relative BTC has returned to the level of 2017, the valuation is relatively reasonable, suitable for low-level layout.

In terms of the purchase currency, it supports the BTC and USDT subscription currencies, which will meet the different needs of the BTC standard and the legal currency standard investors. Different from the inefficient purchase and redemption of traditional market funds, Cobo and ChaiNext jointly created a fund product issuance and bookkeeping solution that can support this digital currency index fund to achieve second-order subscription and redemption.

Relying on the Cobo wallet with 500,000 users, I believe this will quickly increase the awareness of C-end users on the index.

However, it should be noted that index funds are emerging investment products and there are certain risks . In June 2018, OKEX Exchange launched a digital asset portfolio OK06 index that can be freely purchased and redeemed. It is composed of six digital currencies including BTC, ETH, LTC, BCH, EOS and OKB. It is an index fund. Unfortunately, this index fund was removed at the end of March this year. The explanation given by OKEX is business adjustment.

The removal of OK06 cast a shadow on the front of the index fund.

At present, ChaiNext has received nearly 10 million RMB financing, and experts from the industry such as Colorful Angelfish, Prince of Peace, and Cao Yu as consultants. The products have accumulated a lot of fans and close partners through word-of-mouth communication and secondary communication of B-end users.


How will the index market be interpreted next? Babbitt will continue to pay attention.