Ether (ETH), the main token of the Ethereum blockchain, is currently the second-largest cryptocurrency by market capitalization, surpassing Bitcoin (BTC) in terms of usage beyond simple payments. Ethereum’s innovative qualities have led to a proliferation of new digital assets in the Smart Contract Platform (SCP) sector, which encompasses 88 assets representing over 35% of the digital asset market worth approximately $750 billion as of March 31, 2022. The SCP sector is significant as it comprises almost a third of the overall digital asset market, and it offers flexibility to investors seeking exposure to assets in this sector, either as a complement to their existing ETH positions or as a way to gain exposure to smaller assets within the sector.
CoinDesk Indices has introduced two indices related to the SCP sector – the flagship CoinDesk Smart Contract Platform Select Index (SCPX) and the recently introduced CoinDesk Smart Contract Platform Select Ex ETH Index (SCPXX). While the former focuses mainly on ETH, the latter excludes it altogether, providing investors with the option to choose between these indices based on their preferences. Both indices comprise assets that meet certain criteria related to investability, liquidity, and eligibility, including being listed on recognized exchanges, supported by reputed custodians, and meeting certain market cap and trading volume thresholds.
The SCP sector fosters a vibrant ecosystem for innovation, with smart contract platforms featuring network effects, decentralized consensus mechanisms, and support for multiple programming languages that enable developers to build versatile protocols for a variety of uses, from decentralized exchanges and lending platforms to NFT marketplaces. These platforms attract numerous users, empowering individuals to take greater control over their finances and transactions, thus creating a flourishing digital economy with myriad opportunities.
The SCP sector, however, presents some challenges, including debates around the definition of smart contracts, whether they need to be decentralized, and whether permissioned blockchains can be considered smart contract platforms. Nevertheless, the SCPX and SCPXX indices provide investors with greater transparency and essential intelligence, enabling them to make informed decisions and execute investments more efficiently. Investors interested in learning more about CoinDesk Indices and its indices may contact CDI at info@coindesk-indices.com.
It is crucial to note that CoinDesk Indices does not offer investment advice, act as a fiduciary, or promote any investment products linked to its indices. Before making any investment decision, investors should not rely solely on the contents of this document or any statement made by CDI elsewhere. Any investment based on these indices should not be made without considering the risks associated with investing in digital assets. CDI does not guarantee the accuracy, completeness, timeliness, adequacy, validity, or availability of any content related to its indices. CDI assumes no responsibility for any errors or omissions or the consequences arising from the use of any content related to its indices. CDI does not assume any obligation to update any content related to its indices following publication in any form or format.
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