Cryptex Digital Market Cap Index

1. Index Overview

Index Parameters

2. Index Objective

The standard against which digital asset strategies are measured.

The Cryptex Digital Market Cap Index exists to do what no index in digital assets has done properly: capture a broad representation of the digital asset market cap in a single, transparent, rules based measure.

The index provides broad, diversified representation across five thematic sectors of the digital asset ecosystem, balancing the dominance of major networks with meaningful exposure to infrastructure, applications, community driven assets, and emerging projects.

The Cryptex Digital Market Cap Index is designed to serve as:

• A definitive benchmark. The standard against which active digital asset strategies are measured. Every portfolio manager, every fund, every protocol, measured against one number.
• A composable onchain primitive. Natively integrated into DeFi as collateral, a base trading pair, or a building block for structured products. The index doesn't just track the market. It participates in it.
• A passive exposure framework. For allocators seeking diversified digital asset exposure without the operational complexity of managing individual positions across multiple chains, venues, and custody solutions.

3. Constituent Eligibility

Inclusion and exclusion criteria.

Inclusion in the Cryptex Digital Market Cap Index is governed by strict, rules based criteria. No exceptions. No discretionary overrides. An asset qualifies or it doesn't.

3.1 Eligibility Criteria

• 3.1.1 Minimum Market Capitalization. Trailing 90-day volume-weighted average market capitalization of at least $250 million, calculated using free float circulating supply.
• 3.1.2 Minimum Liquidity. Trailing 30-day average daily trading volume of at least $10 million across eligible venues. Volume is measured across both centralized and decentralized exchanges meeting the index's venue quality standards.
• 3.1.3 Exchange Availability. Listed and actively traded on a minimum of three exchanges meeting the index's venue quality standards. At least one listing must be on a venue with a Chainlink price feed available. The asset must also be listed on Coinbase for real-time pricing in the index terminal.
• 3.1.4 Chainlink Feed Requirement. An active Chainlink price feed is a hard requirement. No Chainlink coverage, no inclusion, regardless of market capitalization or liquidity. The index's pricing integrity and Proof of Reserves infrastructure depends on Chainlink data feeds. This is non-negotiable.
• 3.1.5 Blockchain and Token Standard. The asset must be a native token or conform to a widely adopted standard (ERC20, SPL, etc.) on a public, permissionless blockchain. Smart contracts (if applicable) must have been deployed for a minimum of 6 months.
• 3.1.6 Minimum Weight Floor. Any asset whose calculated weight would fall below 0.15% of total index weight at the time of rebalancing is ineligible for inclusion. Positions below this threshold are too small to be meaningfully replicated and add operational complexity without proportionate market representation.

3.2 Exclusion Criteria

The following categories are excluded regardless of market capitalization or liquidity:

• Stablecoins. Assets pegged to fiat currencies, commodities, or other external reference values (e.g., USDT, USDC, DAI). These are settlement instruments, not investable digital assets.
• Wrapped tokens. Tokenized representations of assets already eligible in their native form (e.g., WBTC, WETH, stETH). No double-counting.
• Rebasing tokens. Assets with elastic supply mechanisms that automatically adjust holder balances.
• Assets under active enforcement. Assets subject to active regulatory enforcement actions by the SEC, CFTC, DOJ, or equivalent authorities in the EU, UK, or other major jurisdictions. Subject to expedited review by the methodology committee.

3.3 Methodology Committee Discretion

The methodology committee retains limited discretion in three areas only: sector assignment, edge cases near eligibility thresholds, and extraordinary circumstances such as smart contract exploits or sudden regulatory actions. The committee has zero discretion over the weighting methodology, rebalancing schedule, or concentration caps. These parameters are governed by the rules in this document and may only be modified through CTX governance.

4. Sector Classification

Five-tier sector model.

The digital asset ecosystem is not a monolith. It has structure. The Cryptex Digital Market Cap Index reflects that structure through five thematic sectors:

4.1 Five-Tier Sector Model

1. Major Layer Networks. The dominant base-layer protocols. The primary settlement and value-transfer infrastructure of the entire ecosystem. Inclusion requires both dominant market capitalization and a functioning mainnet with significant economic activity. This is the foundation.
2. L1 + L2 Infrastructure. Layer 1 blockchains and Layer 2 scaling solutions providing execution, interoperability, oracle, and middleware infrastructure. These assets power the operational layer beyond the major networks.
3. DeFi Applications. Tokens governing or representing economic interest in decentralized finance protocols: lending, trading, derivatives, asset management, compute infrastructure, and storage. This is the application layer.
4. Memes & Community Assets. Assets whose value derives from community adoption, cultural significance, and network effects rather than technical utility. Community driven value creation is a structurally significant category within digital assets representing substantial market capitalization and trading volume. Ignoring it would be intellectually dishonest. This index doesn't ignore it.
5. Innovation & Emerging. Early-stage projects, novel categories, and assets that don't fit cleanly into the other four sectors. This tier provides frontier exposure and serves as an incubation layer for assets that may migrate upward as they mature. This tier also includes the issuer reserve weight (CTX).

4.2 Sector Assignment Process

Sector assignments are determined by the methodology committee based on each asset's primary function, market positioning, and ecosystem role. Assignments are reviewed quarterly during the standard rebalancing process. An asset may be reassigned if its primary function has materially changed since the last review.

All sector assignment decisions and rationale are published alongside each quarterly rebalancing report. Full transparency. No black boxes.

5. Weighting Methodology

Sector-stratified. Market-cap weighted. Concentration-capped.

5.1 Overview

The Cryptex Digital Market Cap Index employs a sector-stratified, market-cap weighted within defined tier allocation constraints methodology. Constituent weights within each tier reflect each asset's free-float market capitalization relative to the total eligible market capitalization of that tier's constituents, subject to concentration caps at both the tier and global level. The methodology is designed to balance three competing objectives: market representation, diversification, and replicability. If you can't explain it clearly, you shouldn't be running an index.

5.2 Sector Allocation

Each sector receives an aggregate allocation based on its share of total index weight. Tier 1 is subject to a fixed cap. Tiers 4 and 5 are subject to a combined cap. Tiers 2 and 3 float freely within the residual. Sector allocations for floating tiers are recalculated quarterly:

5.3 Intra-Sector Weighting

Within each tier, constituent assets are weighted by their free-float market capitalization relative to the total market capitalization of all constituents in that tier:

Subject to the concentration caps defined in Section 5.4. When a cap binds, the excess weight is redistributed pro rata among uncapped constituents within the same tier.

One exception applies:

Tier 5 (Innovation & Emerging Assets): CTX, the governance token of the Cryptex protocol, is included in Tier 5 at a fixed weight of 2.0% of total index weight. CTX does not meet the standard eligibility criteria applied to other constituents. This self-inclusion is a deliberate design decision, disclosed transparently as an issuer reserve weight. All other Tier 5 constituents are market-cap weighted from the remaining Tier 5 allocation after the CTX fixed weight is subtracted.

5.4 Concentration Caps

The following concentration caps apply and are binding at each rebalancing event. These caps are enforced in the following priority order: global asset cap first, then intra-tier cap, then minimum weight floor.

5.5 Cap Application Order

At each rebalancing event, concentration caps are applied iteratively:

1. Compute raw market-cap weights within each tier.
2. Apply the 50% intra-tier concentration cap. Redistribute excess pro rata among uncapped assets within the same tier.
3. Apply the 30% global asset cap. Redistribute excess pro rata among remaining assets within the same tier.
4. Verify the 0.15% minimum weight floor. Remove any asset below the threshold and redistribute within its tier.
5. Repeat steps 2–4 until all constraints are satisfied (convergence typically occurs within 2–3 iterations).
6. Set CTX to its fixed 2.0% weight, adjusting remaining Tier 5 assets proportionally.

5.6 Current Allocation (as of March 2026)

5.7 Full Constituent List

All 36 constituents. (as of March 2026)

6. Index Calculation

Real time. Continuous. Verifiable.

6.1 Real Time Index Value

The index value is calculated continuously using Chainlink price feeds for each constituent. Between rebalancing events, the index value at time t is computed as:

Where V(t_r) is the index value at the most recent rebalance, w(a_i, t_r) is the weight of constituent a_i at that rebalance, π(a_i, t) is the current Chainlink price feed, and π(a_i, t_r) is the price at the rebalance date. N is the number of active constituents (36 under normal conditions; fewer if a constituent is temporarily excluded due to oracle circuit breaker activation).

This return-based formulation ensures the index tracks weighted performance regardless of nominal price levels. Equivalently:

Where q_i is the number of units of asset a_i held per unit of the index (determined at each rebalance), and D is the index divisor.

6.2 Index Divisor

The divisor D is adjusted at each rebalancing event to ensure index value continuity. At rebalance time t_r:

The divisor is recalculated:

This ensures the index value immediately before and after rebalancing is identical. No gap. No discontinuity.

6.3 Index Calculation Agent

The index calculation agent is responsible for continuous computation of the real time index value and execution of divisor adjustments at each rebalancing event. The calculation agent operates independently from Cryptex Finance to ensure objectivity and accuracy.

Index Calculation Agent: TBD

6.4 Base Value

The Cryptex Digital Market Cap Index base value is TBD, set as of the base date of February 20, 2026.

7. Oracle Infrastructure

Chainlink. Dual verification.

7.1 Chainlink Price Feeds

All constituent prices are sourced from Chainlink's decentralized oracle network. Chainlink aggregates spot prices from multiple centralized and decentralized exchanges through independent node operators, delivering manipulation-resistant pricing that no single-exchange feed can match.

7.2 Coinbase Real-Time Pricing

For the index terminal and real-time display, constituent prices are sourced from the Coinbase API using each asset's Coinbase product ID (e.g., BTC-USD, ETH-USD). All 36 constituents are verified to be listed and actively traded on Coinbase. Market capitalization is calculated as Coinbase spot price multiplied by circulating supply.

7.3 Chainlink Proof of Reserves

The Cryptex Digital Market Cap Index is designed to support 1:1 asset backed implementations. Chainlink Proof of Reserves provides independent, automated, continuous verification that assets held in custody match the total supply of outstanding tokens in any index linked product.

7.4 Staleness and Deviation Thresholds

8. Rebalancing

Quarterly rebalance. Six-step process.

8.1 Scheduled Rebalancing

The index rebalances quarterly on the first business day of each calendar quarter (January, April, July, October). Each event follows six steps:

1. Eligibility screening. All digital assets meeting the criteria in Section 3 are identified. Current constituents that no longer qualify are flagged for removal. Assets falling below the 0.15% minimum weight floor are flagged for removal.
2. Constituent selection. From the eligible universe, assets are selected across five sectors. The methodology committee assigns sector classifications. Within each sector, assets are ranked by market capitalization. There is no fixed constituent count; the number of constituents is determined by the eligible universe subject to the minimum weight floor.
3. Sector allocation recalculation. Sector allocations are recalculated per Section 5.2. The Tier 1 cap of 51.7% and the combined Tier 4+5 cap of 15% are applied first. Tiers 2 and 3 receive the residual on a floating market-cap basis.
4. Weight assignment. Weights are assigned per Section 5.3, subject to the concentration caps in Section 5.4. The iterative cap application process in Section 5.5 is followed until convergence.
5. Divisor adjustment. The index divisor is adjusted per Section 6.2 to maintain value continuity.
6. Transition period. Weight changes are implemented over a five business day transition window. Weights adjust linearly from old to new, minimizing market impact and reducing predictable rebalancing order flow.

8.2 Rebalance Rate Cap

No constituent's weight may change by more than 2 percentage points per rebalancing cycle. If the required change exceeds this cap, the adjustment is spread across multiple cycles. No exploitable patterns. No front-running opportunities.

8.3 Extraordinary Rebalancing

An off-cycle rebalance may be triggered when:

• A constituent suffers a smart contract exploit resulting in material loss of value.
• A constituent is delisted from all qualifying exchanges.
• A constituent's market capitalization falls below $125 million (50% of the eligibility threshold) for 10+ consecutive days.
• A Chainlink price feed for a constituent is permanently discontinued.

Extraordinary rebalances follow the same methodology on an accelerated 48-hour timeline. All extraordinary rebalances must be ratified by CTX governance through the emergency proposal procedure.

9. Constituent Changes

Additions and removals.

9.3 Transition

When a constituent is added or removed, the transition is implemented over the standard five business day window. The index divisor is adjusted to ensure value continuity.

10. Governance

What can change. What cannot.

10.1 Governable Parameters

The following may be modified through CTX governance:

• Protocol fee levels (within predefined bounds)
• Oracle venue quality standards
• Eligibility threshold levels (market cap, volume, and minimum weight floor)
• Emergency pause activation
• Protocol upgrade proposals (subject to extended timelock)

10.2 Non-Governable Parameters

The following are fixed. Period.

• Market-cap weighting methodology (all tiers)
• Tier 1 concentration cap of 51.7%
• Intra-tier concentration cap of 50%
• Global single-asset concentration cap of 30%
• Combined Tier 4 + Tier 5 concentration cap of 15%
• Five-sector classification structure
• Quarterly rebalancing schedule
• Chainlink oracle requirement
• 1:1 asset backing design requirement
• CTX fixed weight of 2.0%

10.3 Governance Process

11. Risk Factors

Known risks. Disclosed transparently.

• 11.1 Market Risk. Digital asset prices are highly volatile. The index may experience significant drawdowns during market-wide selloffs. Correlation among crypto assets increases substantially during stress periods, reducing the diversification benefit of the multi-asset structure.
• 11.2 Concentration Risk. Bitcoin represents 25.83% of the index at the intra-tier concentration cap, and Tier 1 as a whole represents 51.7%. Adverse BTC price movements will disproportionately impact index performance. The intra-tier and global concentration caps mitigate but do not eliminate single-asset risk.
• 11.3 Liquidity Risk. Certain constituents, particularly in Tiers 4 and 5, may have lower liquidity profiles. This may impact rebalancing costs and create wider spreads during market stress. The 0.15% minimum weight floor reduces but does not eliminate exposure to illiquid tail positions.
• 11.4 Smart Contract Risk. The protocol’s smart contracts have undergone four independent security audits (Quantstamp 2021, Cantina September 2024, Pashov October 2024). Smart contract risk cannot be fully eliminated.
• 11.5 Oracle Risk. The index depends on Chainlink oracle infrastructure for both pricing and reserve verification. Feed unavailability, manipulation, or failure would impact index operations.
• 11.6 Methodology Committee Risk. Sector assignment and edge-case eligibility decisions involve human judgment. The committee’s discretion, while limited, introduces a non-algorithmic element.
• 11.7 Self-Inclusion Risk. CTX is included as a constituent outside standard eligibility criteria. This creates a potential conflict of interest between the index provider and the index itself. The issuer reserve weight is capped at 2.0% and constrained by the intra-tier concentration limit.
• 11.8 Tier Classification Risk. The sector-stratified methodology means that tier assignment materially affects constituent weights. An asset classified in a tier with a smaller budget will receive less weight than its pure market-cap share would warrant, and vice versa. Tier assignment disputes are resolved by the methodology committee with published rationale.

12. Revision History

13. Disclosures

Conflicts. Limitations. Disclaimers.

13.1 General

This methodology document is provided for informational purposes only and does not constitute investment advice, a solicitation, or an offer to buy or sell any securities, digital assets, or financial instruments. This document describes the design and rules of the Cryptex Digital Market Cap Index and may be updated from time to time.

13.2 Conflicts of Interest

13.3 No Guarantee of Performance or Continuity

The Cryptex Digital Market Cap Index is provided on an "as-is" basis. Cryptex Finance makes no representation or warranty regarding accuracy, completeness, or fitness for any particular purpose. Past performance is not indicative of future results.

There is no guarantee of continued operation of the index, the Cryptex protocol, or CTX governance. In the event that Cryptex Finance ceases operations or governance becomes non-functional, the protocol's smart contracts will continue to operate according to their deployed logic, but no further methodology updates, constituent reviews, or rebalancing adjustments will occur.

13.4 Third-Party Dependencies

The index depends on Chainlink oracle infrastructure for pricing and reserve verification. Cryptex Finance does not control or guarantee the availability, accuracy, or continued operation of Chainlink feeds or Proof of Reserves attestations. The index terminal depends on Coinbase API for real-time pricing data.

13.5 Methodology Changes

This methodology may be amended from time to time. Changes to governable parameters follow the CTX governance process in Section 10. Changes to the methodology document itself are subject to a minimum 30-day notice period prior to implementation. All changes and effective dates are published through official Cryptex Finance channels. Prior versions remain publicly accessible.

13.6 Limitation of Liability

To the maximum extent permitted by applicable law, Cryptex Finance, its contributors, and CTX governance participants shall not be liable for any losses, damages, or claims arising from the use of, reliance on, or inability to use the Cryptex Digital Market Cap Index, its methodology, or related infrastructure.

13.7 Independent Evaluation

Prospective users and allocators are strongly encouraged to conduct independent evaluation of the index, its methodology, its risks, and its suitability for their objectives. This includes consultation with qualified legal, tax, and financial advisors as appropriate.

Audit reports are available on the Cryptex Finance website.