What is Index Coop?
Are you tired of traditional investment firms that charge exorbitant fees and lack transparency? Look no further! Introducing Index Coop, the decentralized version of BlackRock that's shaking up the world of finance. Instead of entrusting your hard-earned money to a faceless corporation, you can now join the revolution and become a part of the decentralized investment world.
Index Coop is like a chef's salad of investments, allowing you to mix and match different assets to create a unique and diverse portfolio. And unlike a traditional salad, this one actually grows in value! The value of Index Coop's index tokens is derived from the performance of the underlying assets, so the more the assets grow, the more your portfolio grows.
But what sets Index Coop apart is its decentralization. Instead of relying on a central authority to manage your funds, Index Coop puts the power in your hands through a transparent and secure platform. No more hidden fees or opaque investment decisions, just pure, unadulterated returns on your investment.
To explain how Index Coop decentralization works, we will have to refer to their governance system. Index DAO is governed by a not-so-secret community of $INDEX token holders. It's like the Illuminati of investments, except instead of controlling the world, it's giving the control back to the people. As an INDEX token holder, you can vote on the protocol upgrades, control the community treasury, update the fee configuration and brag about being part of a DAO.
Unlike the Illuminati, being an INDEX token holder doesn't require you to sell your soul. Tokens are being distributed as a "proof of work," meaning you will have to contribute to the progress of Index Coop to earn your tokens. "Not now mom, I'm changing the world with my DAO buddies!"
Index Coop is governed by a pure community of well intended frens, which is why Index Coop has never been hacked. There are two kind of hacks when it comes to Index Protocol: governance hacks and smart contract hacks.
Governance hacks refer to a malicious actor that can acquire a sizable amount of INDEX tokens to sway the votes for his nefarious purposes. As it stands, INDEX tokens are gradually emitted into circulation, with 52% of the supply allocated for the Index Treasury. Set Labs, the creators of Index Coop, retain 28% of the token supply. The tokenomics have been adjusted to ensure the protocol tends towards progressive decentralization.
Smart contracts have been heavily audited before they have been deployed, and the Index Coop devs are watching over the protocol along with the rest of the community. This part is tricky because audits don't guarantee the protocol is safe from hacks. As a precautionary measure, it is good to be aware of the risks before deciding to interact with the protocol.
How does Index Coop work?
Index Coop creates and manages index tokens, which are synthetic assets that track the performance of underlying assets such as cryptos or commodities.
The creation of index tokens begins with the deposit of funds into the platform by users. These funds are used to purchase the underlying assets that make up the index. The weight of each underlying asset in the index is determined by a predetermined algorithm, and the value of the index token is tied to the value of these underlying assets.
One of the key features of Index Coop is its composability. DeFi tokens that make up the indexes can be integrated with multiple protocols. As a result, users can use index tokens as collateral for their trades and multiply their revenue generating opportunities.
In addition to running on decentralized governance, Index Coop has a unique advantage as an index creator in the form of meta governance. Since these indexes hold the underlying tokens, Index Coop holds voting power in the constituent protocols.
This is similar to traditional finance where the dramatic growth of passive investing has conferred enormous voting power to a handful of asset managers. Asset managers hold most shares of US public companies, and their clients typically give authority to vote proxies on their behalf. The number of votes controlled by large asset managers can ultimately decide the outcome of an initiative.
This creates enormous value for the INDEX token. It is not only a play on the long-term success of Index Coop and their products. It is also a way to capture the value of governing multiple protocols.
How to make money on Index Coop?
Index Coop helps you make money in ways that were not possible before. First and foremost, buying into an index helps you gain exposure to underlying assets that otherwise you could not afford. For example, you can have exposure to multiple assets while holding only one token, or tokens that represent long ETH, and so on.
Index Coop Staking & Liquidity Provision
One of the key features of Index Coop is the ability for users to earn rewards through staking their index tokens. Staking involves locking up tokens for a specific period of time in order to receive a share of the platform's rewards. The amount of rewards earned depends on the amount of tokens staked and the overall performance of the platform.
In addition to staking, users can also earn rewards by providing liquidity to the platform through the creation of liquidity pools. Liquidity providers earn a share of the platform's transaction fees for facilitating trades between buyers and sellers of index tokens. These fees are a source of revenue for the platform and help to maintain the stability of the index tokens' price.
Price Prediction for Index Coop — Can it hit $1000?
Buying and hodling INDEX — the native token of Index Coop — is one way of potentially making money on Index Coop.
By looking at its current price, it’s natural to think about the chance of INDEX hitting $1000 per token. This can happen sooner, or way in the future, and is determined by a couple of ever changing factors.
Let’s examine the potential growth of the INDEX token by analyzing its tokenomics. INDEX’s current market cap sits comfortably at ${MARKET_CAP}. With {CIRCULATING_SUPPLY} INDEX tokens being in circulation today, that means a price of {PRICE} per INDEX.
How did we come to that calculation? It’s quite easy, the price of a INDEX token is equal to its current market cap divided by the number of tokens in circulation. Dividing ${MARKET_CAP} by {CIRCULATING_SUPPLY} gives us a result of {PRICE} for each INDEX coin.
By changing the order in the simple formula above we can use it to calculate other things as well. This helps us a lot because we can deduce the market cap of INDEX at different token prices. Then, we can use the result to compare it to the current state of the network and see what would be required for INDEX to hit that price.
At a price of $1000 per token, that means the current market cap of INDEX would equal ${{CIRCULATING_SUPPLY} * 1000}. Remember that we arrived at this number by multiplying the amount of circulating tokens by $1000.
Now let’s shift our attention to the fully diluted market cap.
Some blockchains may have their tokenomics built in a way that only a small percentage of tokens are circulating at the beginning. This can be misleading because we don’t have the full picture and only take into account the current number of coins released in the market.
The fully diluted market cap represents the total value of a coin if all tokens were in circulation. INDEX’s whole supply of tokens is {MAX_SUPPLY - TOTAL_SUPPLY + CIRCULATING_SUPPLY} INDEX which means that no more coins above that number will ever be created.
These tokens are not created at the discretion of a specific entity. They are created automatically by the network to reward different actors that keep it secure.
How does this impact the price of INDEX? Taking into account the current price of a INDEX token, that would result in a fully diluted market cap of ${MAX_SUPPLY - TOTAL_SUPPLY + CIRCULATING_SUPPLY * PRICE}. INDEX coins that have been burned are not taken into consideration because they have been permanently removed from circulation.
Whether it seems gigantic or not, the number we came to above only takes into account the current price of a INDEX token. Doing the same calculation but with a price of $1000 gives us a result of ${{MAX_SUPPLY - TOTAL_SUPPLY + CIRCULATING_SUPPLY} * 1000} for the INDEX protocol fully diluted market cap.
These are all crucial details to know when calculating if INDEX can reach the price of $1000 per token. If the diluted market capitalization is way too high, the token has little room left to grow. Blockchains in general have no cap on the value they can reach, whether that number seems possible it’s totally up to you.
The future of INDEX depends solely on its growth as a network used by tens and hundreds of millions of users.
If you’re looking to add some INDEX to your portfolio, the most trusted places to get some are Binance and Coinbase.