<aside> 💡 This is the rough draft litepaper by 0xBay & Redphonecrypto

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The Degen Index (DEGEN)

The Degen category is an alpha-seeking index of small- and medium-cap Ethereum-based protocol tokens. An initial list of 30 tokens was curated from the community including many of the most active DeFi investors in the industry. All future index components will be selected with input from the index users and <Project x> tokenholder communities.

Category description

As its name implies, the Degen category aims to find higher-risk, higher-reward assets by seeking out emerging projects with exceptionally high growth potential predominantly in the DeFi sector. It's compents all have strong communities and large total addressable markets. Market caps range from $50 million to $2 billion. If a token's market cap outgrows the index, it will be automatically replaced with the largest market cap token on the pre-existing list of alternates (described below). In this way, the index will constantly evolve to capture upside from tokens during their most rapid growth phases. To maximize upside potential, interest-earning version of tokens will be held over non-interest-bearing versions when ample liquidity is available. Snapshot votes will be held semiannually (or more frequently if the alternate list is in danger of being emptied) to add or remove tokens from the index or alternate list. In the event that a token in the index is compromised or impacted by a bug, trading of the Degen token will be halted until it can be replaced in order to protect the index's value. To protect against market manipulation, a token must have sufficient liquidity on its ETH trading pair.

Token's criteria

The index has the following criteria for inclusion:

1. The token has a market cap ranging from $50 million to $2 billion (as calcuated by a rolling 14-day TWAP on Uniswap).
2. This token is at least a week old.
3. No major vulnerabilities have been discovered in the token contract.
4. The token's supply can not be arbitrarily inflated or deflated maliciously.
5. The control model should be considered if the supply can be modified through governance decisions.
   • The token does not have transfer fees or other non-standard balance updates.
6. The token meets the requirements of the ERC20 standard.
   • Boolean return values are not required.
7. At least $300,000 worth of liquidity is locked in the Uniswap market pair between the token and WETH.
   • This does not apply to WETH.
8. The token is one of:
   • Protocol token for an Ethereum-based project.
   • Governance token for a DeFi project.
   • Wrapper token for a blockchain's native currency.

The Degen Index Composition

Market caps pulled Jan. 18, 2021

1. Sushi (SUSHI)

$964 million market cap ($1.9 million in SUSHI-ETH Uniswap liquidity)

Sushi is the governance and fee-earning token on the Sushiswap decentralized exchange (DEX) and it's growing number of crypto-related services. Daily trading volumes on Sushiswap regularly exceed $300 million.