MVDACS - MarketVector Digital Asset Classification System
The digital assets market has expanded fast over the past several years, with new protocols and applications constantly being developed. Participants in the digital assets market are eager to comprehend its diverse use cases, allocate cash, and manage investments. As the asset class continues to expand and market volatility persists, the necessity for performance monitoring and risk management in digital asset markets increases. To accomplish this, market players require assistance traversing the universe of digital assets and categorizing these assets to better define their risk profile and comprehend their returns.
The world has gone from a singular focus on Bitcoin to a much wider adoption of DeFi apps, distributed computing platforms, NFTs etc. As with the equity markets, categorization of sub asset groupings into sectors and more recently themes are important in the institutional adoptions of diverse asset classes.
What do we have to offer?
MarketVector Indexes created the MarketVector Digital Asset Classification System in 2020 in order to provide an efficient investment tool for capturing the breadth, depth, and progress of crypto sectors.
A three-tiered, hierarchical industry classification system underpins the category scheme.Cryptoassets are classified quantitatively and qualitatively. At the Industry level, each protocol is allocated a single classification based on its primary business activity. MarketVector considers the economic driver and end-user demand to be critical variables in establishing the primary business activity of a protocol.
However, market perception and technical changes are acknowledged as vital and relevant information for classification reasons and are considered during the monthly review process.
In what ways does our Taxonomy benefit investors?
Classifications can be useful for identifying market cycles and quickly assessing which sectors are outperforming. It enables investors to exploit those narrative plays end enhance the alpha potential of their portfolios. Our taxonomy helps to create sector-based and sector-rotation plans that are consistently specified at the level our clients specify. It also enables to compare and report on sector exposures versus peers or benchmarks.
How does it work?
On a monthly basis, we currently screen the Top 450 token by market cap. Whenever a token is larger than $ 250 Mio. In size, we do the deep dive and screen the protocol. We read the 3rd party research, look at the whitepaper, read the discord channel to identify the value driver and end user demand. We defined a 3 Tier system of 8 categories, 28 industry groups and 70 industries.
Pie Chart of the Digital Asset Taxonomy
MarketVector has five digital asset categories available
- MarketVector™ Centralized Exchanges Index (ticker: MVCEX)
- The MVIS® CryptoCompare Decentralized Finance Index (ticker: MVDF),
- The MVIS® CryptoCompare Infrastructure Application Index (ticker: MVIAP),
- The MVIS® CryptoCompare Media & Entertainment Index (ticker: MVME),
- The MVIS® CryptoCompare Smart Contract Index (ticker: MVSC).
These broad category indices capture the performance of coins with $250m market cap and $10m ADTV. In addition to the broad categories, MarketVector provides a Leaders Index for each Index category. The Leaders Indices capture the performance of coins with $1bn market cap and $25m ADTV, and introduces additional screening requiring the coins to be traded on a major US exchange and supported by a reputable crypto custodian. In addition, the investable Leaders indices include a 20% buffer for existing constituents so as to limit turnover.
- The MVIS® CryptoCompare Decentralized Finance Leaders Index (ticker: MVDFLE),
- The MVIS® CryptoCompare Infrastructure Application Leaders Index (ticker: MVIALE),
- The MVIS® CryptoCompare Media & Entertainment Leaders Index (ticker: MVMELE),
- The MVIS® CryptoCompare Smart Contract Leaders Index (ticker: MVSCLE).
MarketVector Category Whitepaper
|Classification Framework for Digital Assets|
The world has gone from a singular focus on Bitcoin to a much wider adoption of DeFi apps, distributed computing platforms, NFTs etc. As with the equity markets, categorization of sub asset groupings into sectors and more recently themes are important in the institutional adoptions of diverse asset classes. Classifications can be useful for identifying market cycles and quickly assessing which sectors are outperforming. It enables investors to exploit those narrative plays end enhance the alpha potential of their portfolios.Download the Whitepaper
Defi is a term for digital assets that are used to support financial products and services that aren't run or controlled by a single entity. There are no barriers to entry or proof of identity needed to get these financial products and services. All DeFi tokens operate on platforms for smart contracts, offer open-sourced liquidity, and give token holders the ability to reserve governance rights.Download the Whitepaper
|Smart Contract Platforms|
Smart contract platforms host and execute smart contracts, similar to operating systems, like iOS or Android, that host and deploy Apple and Android apps. The MarketVectorTM diversified Smart Contract Indexes enable investors to measure and access the broader Layer-1 chains market without worrying about picking any specific Layer-1 chain.Download the Whitepaper
|Powering the Decentralized Internet: Why Infrastructure Applications are Critical to the Growth of Web3.|
The paper discusses the importance of decentralized infrastructure for the growth of the new decentralized internet, also known as Web3. It notes that these infrastructure projects, such as decentralized file storage, wireless internet, and cloud computing, are necessary to support decentralized software and prevent censorship, but it also highlights the challenges of scaling these projects, which require significant capital investment..Download the Whitepaper
|Will We Ever Have CEX Again? Exploring the Benefits and Drawbacks of Centralized Crypto Exchanges.|
The paper explores the value proposition of CEXs, including their convenience, liquidity, and support, as well as the risks associated with using these platforms. It also discusses the emergence of exchange tokens and their potential impact on the industry.Download the Whitepaper
|Index||Last Close||Open||Last||Change||Change (1Y)||Range (1Y)|
|116.85||116.85||-||-||-9.84%||10.12 - 464.91|
|49,838.24||49,838.24||-||-||107.11%||6,938.11 - 148,439.73|
|MVSC||MVIS® CryptoCompare Smart Contract Price Index|
|MVBTC||MVIS® CryptoCompare Bitcoin Price Index|
|MVCEX||MarketVector™ Centralized Exchanges Price Index|
|MVDF||MVIS® CryptoCompare Decentralized Finance Price Index|
|MVIAP||MVIS® CryptoCompare Infrastructure Application Price Index|
|MVME||MVIS® CryptoCompare Media & Entertainment Price Index|