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Helix L1 Index (L1X)

Overview

The Helix "L1 Index" is a cryptocurrency index designed to provide investors with diversified exposure to the most promising L1 blockchain projects.

Index Composition - Layer 1 Tokens

Components: 10 tokens, including Solana (SOL), BNB (BNB), Tron (TRX), Avalanche (AVAX), Sui (SUI), Toncoin (TON), Hyperliquid (HYPE), Injective (INJ), Sonic (S), and Sei (SEI).
Weighting Methodology: Market capitalization-weighted.
Rebalancing Frequency: Monthly.

The Weights -

Solana (SOL)

0.25

BNB (BNB)

0.25

Tron (TRX)

0.1267427

Avalanche (AVAX)

0.1045627

Sui (SUI)

0.0931559

Toncoin (TON)

0.0868188

Hyperliquid (HYPE)

0.0506971

Injective (INJ)

0.0139417

Sonic (S)

0.0126

Sei (SEI)

0.0114068

How the Index is Priced

1. Initial Calculation:

Market Cap Calculation: For each token, its market capitalization is calculated by multiplying the token's price by its circulating supply.
Initial Weights: Each token’s weight is determined by dividing its market cap by the total token market cap.

2. Price Calculation:

Index Value: The index is priced by aggregating the weighted prices of each component token.
Formula: First we divide the market capitalization for each asset by the sum of the total market capitalization. This gives us the asset-specific weight for for the index. Then we normalize the weights, such that no single asset represents more than 25% of the index. Lastly, we add up the normalized market capitalizations and divide by 100,000,000 (10^8) to get an index price for the asset.

Here are the steps in formula form:

Calculate the total market capitalization:

Calculate asset-specific weights:

Calculate normalized market capitalizations:

where

Calculate the index price:

The index price is now:

Index Operation and Investor Use

1. Index Usage:

Benchmarking: Investors can use the "L1 Index" as a benchmark to measure the performance of their portfolios.

2. Risk Management:

Cap on Dominance: The representative caps prevent any single token from dominating the index, reducing concentration risk.
Diversification: By including 10 tokens, the index mitigates the impact of poor performance in any one project.

3. Performance Monitoring:

Real-Time Tracking: The index value is updated in real-time based on the latest prices of the component tokens.
Historical Data: Historical index values are available to analyze trends and performance over time

Helix L1 Index (L1X)

Overview

The Helix "L1 Index" is a cryptocurrency index designed to provide investors with diversified exposure to the most promising L1 blockchain projects.

Index Composition - Layer 1 Tokens

Components: 10 tokens, including Solana (SOL), BNB (BNB), Tron (TRX), Avalanche (AVAX), Sui (SUI), Toncoin (TON), Hyperliquid (HYPE), Injective (INJ), Sonic (S), and Sei (SEI).
Weighting Methodology: Market capitalization-weighted.
Rebalancing Frequency: Monthly.

The Weights -

Solana (SOL)

0.25

BNB (BNB)

0.25

Tron (TRX)

0.1267427

Avalanche (AVAX)

0.1045627

Sui (SUI)

0.0931559

Toncoin (TON)

0.0868188

Hyperliquid (HYPE)

0.0506971

Injective (INJ)

0.0139417

Sonic (S)

0.0126

Sei (SEI)

0.0114068

How the Index is Priced

1. Initial Calculation:

Market Cap Calculation: For each token, its market capitalization is calculated by multiplying the token's price by its circulating supply.
Initial Weights: Each token’s weight is determined by dividing its market cap by the total token market cap.

2. Price Calculation:

Index Value: The index is priced by aggregating the weighted prices of each component token.
Formula: First we divide the market capitalization for each asset by the sum of the total market capitalization. This gives us the asset-specific weight for for the index. Then we normalize the weights, such that no single asset represents more than 25% of the index. Lastly, we add up the normalized market capitalizations and divide by 100,000,000 (10^8) to get an index price for the asset.

Here are the steps in formula form:

Calculate the total market capitalization:

TMC= \sum_{i=1}^{n} MC^{i}

$MC^{i}$ represents the element with index $i$ in the real valued vector $MC \in \R^{n}$

Calculate asset-specific weights:

w^{i} = \frac{MC^{i}}{TMC}

where $w^{i}$ represents each element of the real valued vector $w_{crypto} \in \R^{n\times1}$ $w_{equity} \in \R^{m \times 1}$

Calculate normalized market capitalizations:

Based on the new $nw$ we calculate the total normalized market cap:

nmc = MC_{T} \ nw

where

nmc \in \R^{(n+m) \times 1}

Calculate the index price:

The index price is now:

S_t^{index} = \frac{\sum_{i=1}^{n+m} nmc}{\text{divisor}}

where the numerator is a vector summation, and the $\text{divisor} = 10^{8}$ .

Index Operation and Investor Use

1. Index Usage:

Benchmarking: Investors can use the "L1 Index" as a benchmark to measure the performance of their portfolios.

2. Risk Management:

Cap on Dominance: The representative caps prevent any single token from dominating the index, reducing concentration risk.
Diversification: By including 10 tokens, the index mitigates the impact of poor performance in any one project.

3. Performance Monitoring:

Real-Time Tracking: The index value is updated in real-time based on the latest prices of the component tokens.
Historical Data: Historical index values are available to analyze trends and performance over time