The Neutrino team expresses its gratitude to all Neutrino DAO participants for their trust and active support. Thanks to your efforts, we have successfully formed a treasury amounting to 400k XTN.
The primary objective for the upcoming sprint is to create a new DeFi index, which will be based on 6 key tokens of the Waves network, namely: WBTC, ETH, BNB, MATIC, TRX, WAVES, available through Pepe Bridge. In the future, we would like to increase the number of assets, but currently, we are limited by the number of tokens supported by Pepe bridge.
Recently, there has been a significant movement in the crypto industry towards integration with traditional financial instruments. One of the notable examples of this trend is the attempts by many companies to gain approval for the launch of cryptocurrency ETFs.
On October 16th, the news about the potential approval of a Bitcoin ETF led to its sharp increase to $30k, confirming the strong interest of investors in such innovations. This surge undoubtedly indicates the market’s maturity and readiness for new financial instruments based on cryptocurrencies.
In the context of these global trends, our team’s proposal is to create a DeFi index fund which currently seems to be particularly relevant and in demand.
But let’s start with the basics. A stock index is a composite index calculated based on the prices of a specific group of securities - the ‘index basket’. In other words, it’s a virtual set of assets assembled based on some criteria. The exchange-traded funds, or ETFs, are often formed based on popular indexes. These funds purchase all the companies (stocks) from the index list in the required proportion, and sell a portion of all these companies to the investor in the form of a fund share.
A crypto index is an index based primarily on crypto-assets (tokens), assembled according to a certain criteria. Currently, crypto indexes are mainly accessible by purchasing ETFs (shares in an ETF), some of whose assets include cryptocurrencies as well. Most ETFs are centralized managed funds that charge fees for their services. In addition, entry and exit from such a fund are usually time-restricted and are only available during specific periods. In addition to this, there might be restrictive conditions on whom you can sell your shares to, limiting the number of buyers available to you. In the DeFi market such products are rare. Our goal is to create a unique product in this direction.
The primary advantage of a crypto fund is the ability to mitigate the volatility of your capital. During the market downturns this is a plus, as the losses are minimized. During the market growth, the index might lag behind the general dynamics but still grow.
Our objective is to create not a simple crypto fund, but primarily the DeFi (decentralized finance) fund, managed by the smart contract.
Secondly, in order to make our index more sought-after, we aim to provide token swapping within the index, similar to Uniswap but within certain intervals. The crypto fund will organically grow by means of swap fees. Adding such a killer feature will allow us to outcompete the traditional funds and make our fund more appealing to investors.
We plan to implement a proof of concept (POC) for the Neutrino Crypto DeFi Index (NCDI) based on the existing Neutrino solutions within the Waves network. This will allow us to save time and money by modifying the existing smart contracts and UI, and by reusing experience that was gained by the team in the Waves ecosystem. Moreover, if the product proves successful and in demand, we will consider the possibility of porting it to EVM-compatible blockchains.
Currently, the NCDI product exists at the idea level. We will need time for modeling. In the first iteration (3 monthsmonth), we aim to simulate the index’s behavior based on Binance historical data.
The main role in the new product will be played by gNSBT holders and Neutrino DAO participants. New possibilities and utilities for gNSBT are one of the primary goal, because it can boost NSBT and as a result the Neutrino DAO treasury.
To implement the POC concept, we need to cover the team’s operational expenses for this period. The current monthly expenses for the team are as follows:
- dev team costs $13k
- infrastructure and software costs $1k
Total $14k monthly.
Thus, the treasury covers the expenses for Neutrino’s first sprint.