Does the sheer number of different cryptocurrencies make your head spin? Or perhaps keeping track of the taxable events while rebalancing your portfolio and having to shell out for gas fees has you down? Enter crypto index tokens: offering broad crypto exposure, savings on gas fees, and automatic rebalancing - all to make your investing journey easier. However, as always in crypto, there's more than one option to choose from; let's dig into the popular, yield-bearing DeFi Index (BDI) and Total Crypto Market Cap Token (TCAP) to see how they stack up.
BDI & TCAP each come with their own strengths to consider.
Certainly there are other considerations to keep in mind for your particular situation as well. But when you're evaluating index token options, whether they be BDI, TCAP or something else, make sure you keep these key considerations in the back of your mind. Don't forget to stay tuned into Cryptex for more index token StackUps.
BasketDAO DeFi Index (BDI)
The DeFi Index (BDI), by the BasketDAO team, is a DeFi index provider that offers users exposure to its underlying tokens, currently 15. In addition, BDI also offers the ability to generate passive income on these assets by utilizing yield farming strategies such as Yearn vaults as well as holding yield bearing tokens (such as cTokens from Compound). 70% of the yield generated from these assets are reinvested into BDI while the remaining 30% of the yield is used to buy BASK and distributed to xBASK holders - a separate project by BasketDAO.
BDI rebalances as needed with the latest allocation holding 15 tokens: UNI, AAVE, MKR, COMP, LINK, and SUSHI account for about 75% of the current index holdings. For more information, visit https://basketdao.org/BDI and https://www.bdpi.live/#bdi.
Total Cryptocurrency Market Capitalization (TCAP)
Total Crypto Market Cap Token (TCAP), by the Cryptex team, is designed to give investors accurate, real-time price exposure to the total capitalization of the cryptocurrency market via a single, synthetic asset. Data from a number of oracles is aggregated in order to establish a total market cap median value, which is then bridged on-chain through an audited Chainlink Smart Contract.
TCAP rebalances in real-time and by design includes everything: DeFi, DeFi Indexes, Stablecoins, Governance Tokens, Asset-back tokens, and wrapped tokens. For more information, visit https://cryptex.finance/.
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