Index Coop is a community-led project that creates crypto and maintains index products. The indexes give people exposure to the performance of a collection of tokens, including those from DeFi protocols and NFTs. The indexes are built on Set Protocol's infrastructure.
What are crypto indexes?
Crypto indexes are managed 'baskets' of tokens that automatically re-balance each month using smart contracts. If you want to invest in DeFi, NFTs or the metaverse, but don't like the idea of having to constantly manage a portfolio of different tokens - then crypto indexes have you covered.
How to buy indexes in Argent zkSync
You can purchase indexes through Token trade. For this:
- Tap Trade in Argent Assets tab or go to Invest tab > Trade crypto
- Tap Select a token to choose the index to invest in
- Select the token you wish to sell for the index, and the amount
- Tap Buy and choose the payment token and amount
- Tap Review trade
- Tap Trade now to complete the transaction.
The first major downside of DeFi indexes is that you are losing some control over the tokens in your portfolio. If you determine that a token is overvalued, or disagree with its inclusion in the index, you may not have any recourse to modify it. On the other hand, you could end up gaining exposure to a token that explodes in value you might not have expected.
Another downside to be aware of with DeFi indexes is smart contract and oracle risk. Oracle risk could arise when the 'oracle' that the token uses to get its prices from somehow experiences a failure, either through hacking or some other incident. This could cause the value of the index to drop as it attempts to rebalance to account for faulty information.