Hashdex co-developed the Nasdaq Crypto Index (NCI) with one goal in mind: provide investors a reliable benchmark that includes the world’s most promising crypto assets. 

 

On June 1, one of these incredibly promising assets was added to the index—Polkadot (DOT). We have been closely tracking this project since its launch, and are excited that investors in NCI-tracking funds now have access to Polkadot. 

 

Connecting the (blockchain) dots

Polkadot is a smart contracts platform created to build and connect blockchains. Unlike other smart contract platforms, Polkadot uses a three-level blockchain structure. The Relay Chain sets network security and consensus, Parachains are application-specific and host tokens, and Bridges allow Parachains to be interoperable with Layer-1 networks like Ethereum and Bitcoin.[1] Because Polkadot allows developers to build blockchains from scratch, it is sometimes called a “Layer-0” blockchain. 

Polkadot’s interoperability features make it an increasingly attractive tool for developers and entrepreneurs working to build a more decentralized internet—Web3. The project is the flagship protocol from the Web3 Foundation, which was created in 2017 to help fund, research, and advocate for Web3-related initiatives. Polkadot is viewed as a project at the forefront of the future of the internet, and currently has a market cap of nearly $10 billion.[2]

 

The NCI approach

The NCI’s quarterly reconstitution is part of the process to ensure that the index keeps up with the rapidly developing crypto ecosystem. Like all NCI constituents, Polkadot was included because it meets several high standards and is supported by institutional-grade exchanges, custodians, and other service providers. NCI assets must meet a strict liquidity threshold and have a free-floating price (i.e., the NCI holds no stablecoins), and the index’s innovative pricing methodology makes it extremely resistant to manipulation and technical problems, which helps protect its reliability. All of these factors help differentiate the NCI from other crypto indices. 

 

Hashdex was founded to enable and empower investors to participate in the crypto economy. Our partnership with Nasdaq has helped innovative investors gain simple and secure access to these markets, many for the first time. We believe the inclusion of Polkadot within the NCI is another step in the direction of a decentralized future that will be more open and accessible. As the crypto market evolves, we are excited to continue to offer investment products that allow investors to capitalize on these transformational technologies.

 

References

[1] Image adapted from Polkadot Lightpaper, An Introduction to Polkadot, accessed May 25, 2022.

[2] https://messari.io/

 

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This material is intended for information purposes only, and does not constitute investment advice, a recommendation or an offer or solicitation to purchase or sell any securities to any person in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. The opinions expressed are as of February 2022 and are subject to change without notice. Recipients should consult their own advisors, including tax advisors, before making any investment decision.
This material is not an offer to sell or the request of an offer to buy the securities or other instruments mentioned. If any offer and sale of securities is made, it will be in accordance with the confidential offering memorandum (the “OM”) of the respective fund and only in jurisdictions where permitted by law. The OM describes risks related to an investment in the fund (including loss of the entire investment) and will qualify and supersede the information presented in this letter. Investors should refer to the OM for more complete information about the fund, including certain investment risks, management fees and fund expenses. This letter does not constitute part of any OM or other offering document. Investment in any fund is highly speculative and is not intended as a complete investment program. It is designed only for sophisticated persons who can bear the economic risk of the loss of their entire investment in the fund and who have limited need for liquidity in their investment. There can be no assurance that the mentioned funds will achieve its investment objective or return any capital. Certain information contained herein has been obtained from third-party sources and have not been independently verified by Hashdex, which assumes no responsibility for the accuracy thereof.

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