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How to buy token indexes on Layer 2

One tap exposure to DeFi, infrastructure, NFTs and the metaverse

Edward Wilson
Mar 15, 2022

We're excited to share that we've added several token indexes for trade in our Layer 2 account. These tokens from Index Coop make it easy to invest in DeFi, Data, the metaverse, and more, for less than $1.

What is Index Coop?

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?

Inspired by traditional stock market ETFs, 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.

Benefits of indexes

  • Monthly, automatic, on-chain rebalancing of tokens
  • Save on gas fees vs buying tokens individually
  • Simplified accounting as rebalances are not taxable events
  • Tokens can be easily sold or redeemed for their underlying assets
  • Quick, easy, and trusted exposure to core crypto categories such as DeFi.

Index Coop indexes available in Argent on Layer 2

We have five indexes available:

DeFi Pulse Index (DPI)

DPI tracks the performance of decentralized financial assets across the market and currently includes UNI, AAVE, MKR, COMP, SNX and others

DeFi Pulse Index token breakdown
Metaverse Index (MVI)

Designed to capture the trend of entertainment, sports and business shifting to take place in virtual environments, and currently includes ENJ, MANA, SAND, AXS and others.

Metaverse Index token breakdown

Bankless Bed Index (BED)

BED seeks to give safe, passive exposure to a vehicle that captures equal-weighted upside from the most promising use cases and themes in crypto: store of value (BTC), programmable money (ETH), and decentralized finance (DPI).

Bankless BED index token breakdown
Data Economy Index (DATA)

The Data Economy is an ecosystem of data-based products and services. Whereas DeFi is disrupting traditional banking and financial services, the Data Economy is disrupting the data monopolies built in Big Tech over the past 20 years. The index currently includes LINK, GRT, NMR and others.

Data Index token breakdown
Bankless DeFi Innovation Index (GMI)

GMI consists of promising early stage DeFi projects which are not yet considered “blue chip”. The index currently includes ALCX, CVX, DPX, FLX and others.

GMI Index token breakdown
JPG NFT Index(JPG)

JPG provides broad exposure to blue-chip and premier NFT collections through a single liquid token. JPG is composed of fungible versions of NFTs such as fractional NFTs, NFT liquidity vaults, NFT curation DAOs, NFT currencies, and wrapped NFTs.

JPG Index token breakdown

How to buy crypto indexes in Argent on Layer 2

Buying indexes in Argent is easy, just follow these steps:

  1. Tap 'Trade' in Argent
  2. Tap 'Select a token' to choose the index to invest in
  3. Select the token you wish to sell for the index, and the amount
  4. Tap 'Buy' and choose the payment token and amount
  5. Tap 'Review trade'
  6. Tap 'Trade now' to complete the transaction.

Downsides & risks of indexes

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.

Further reading

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