MatrixETF is the next generation of decentralized ETF platform supporting cross chain.
The index product of MatrixETF is a kind of crypto index ETF, the goal is to track the market presentation of qualified tokens in the crypto market and blockchain field. This kind of fund is based on a basket of token assets, where users don’t need to purchase these tokens in the exchanges. Instead of missing the potential high return from the crypto market, they can accomplish one asset to another popular asset investment only through a simplified placement. In this case you can see that Matrix Index product is one of the simplest methods to allow investors participating in the financial crypto market.
After launching the first Index product based on Ethereum — Matrix DeFi Index(MDI), we are going to launch the Index product based on Solana: Matrix Solana Index(MSI).
Matrix Solana Index(MSI) is a first index to track the top presentation in Solana ecosystem, which provides investors with an investment and autonomous portfolio which is based on Solana ecosystem and decentralized governance. By holding MSI you can easily participate in investing in the Solana project, realize diversified asset placements and enjoy the prosperity of the Solana dynamic ecosystem.
Along with the popularity of DeFi in these two years in the crypto market, everyone wants to get involved in it. However almost all DeFi applications are established on Ethereum network with high gas fees and low TPS, which limit the ordinary users joining DeFi. Therefore the Solana network is in the hot trend with the advantages of low cost, high speed and good feasibility, more and more DeFi applications are getting into the Solana ecosystem.
Solana is the fastest blockchain in the world and the fastest growing ecosystem in the crypto field now, with more than 400 projects covering all kinds of DeFi applications such as DEX, NFI, Stable Token, Oracle, Wallet, UI, Web3.0 etc.
We have seen the developing speed of the Solana ecosystem with a firm that this is the beginning. Solana will play an important role in the field of DeFi, NFT, Web3.0 and the crypto market. This is why we chose to deploy in the Solana ecosystem.
We launched the Index product based on the Solana ecosystem: Matrix Solana Index(MSI).
When we designed Matrix Solana Index, we referred to the project classification of CoinGecko and CoinMarketCap to Solana Ecosystem, then filtered the top and potential asset from it.
By comprehensive consideration of market trend, project market cap comparison, project developing status, the place in the market and technology（ limits on Solana transaction sizes), we have chosen 8 protocols of SOL. SRM. RAY. FIDA. MNGO. ATLAS. SLIM. TULIP to constitute MSI, in order to track the market presentation and developing trend of Solana ecosystem.
The other tokens are as backup tokens such as AUDIO. OXY. KIN. ORCA. STEP. COPE. PORT. Sunny etc,. Once one performs better than the initial 8 kinds of MSI component tokens, it will replace the old one to get into the index pool and be realized by Index rebalance.
MSI Weighting Proportion
MSI is constituted by 8 popular projects of Solana blockchain such as SOL. SRM. RAY. FIDA. MNGO. ATLAS. SLIM. TULIP.
MSI is a first index product focusing on Solana ecosystem, all belonged projects are high qualified projects in Solana ecosystem with their own tokens, own protocols and corresponding eco functions:
SOL: a decentralized blockchain built to enable scalable, user-friendly apps for the world.
SRM: a protocol for decentralized exchanges.
RAY: on-chain order book automated market maker (AMM) , TVL: $1.77 Billions.
FIDA: on-chain Perpetual swaps, DEX, Name service, Bots.
MNGO: leveraged trading platform, including Spot Margin, Perpetual Futures, Borrow & Lend, etc.
ATLAS: A grand strategy game of space exploration, territorial conquest, political domination, and more.
SLIM: Solana’s IDO & Staking platform.
TULIP: Solana’s Yield Aggregation Homestead, Total Value Locked:$0.794 Billion.
When calculating different MSI component token weighting proportions, we utilize 30% Fundamental Weighting+70% Market Capitalization Square Root Weighting to compute each basic asset allocation and weighting proportion. (For detailed method please refer to《MatrixETF Index Methodology》）
According to MatrixETF Index Methodology, there are 5 standards to filter in Fundamental Weighting:
Token Economic Model
Security of protocol
Token trade risk
According to 5 features of Fundamental Weighting, we compute MSI component token weighting proportions as below:
Market Capitalization Square Root Weighting
Market Capitalization refers to the project circulation market capitalization, according to the authoritative data of CoinGecko and Coinmarketcap, to compute circulation market capitalization by obtaining Token prices and circulation data. There are 3 market wide accepted methods to weight the project market capitalization: Market Capitalization Weighting, Market Value Square Root Weighting and Equal Weighting.
According to Market Capitalization Weighting, we compute MSI component token weighting proportions as below:
Market Capitalization of SOL (94.80%) is higher than the biggest asset proportion（Max ≤ 80%）, this is why we chose Market Capitalization Square Root Weighting to restrain one asset impact to portfolio. We compute MSI component token proportions as below:
Final Weighting Proportion
According to the weight method of 70% Market Capitalization+30% Fundamental Weighting, we comprehensively compute MSI component token final proportions as below:
For the unknown Token(MSI),We have applied the code and information to Solana, which will take some time for auditing and reviewing. Please keep your patience, we ensure that the update will be presented on the Solana webpage soon.
By using MatrixETF APP, it will be ready when MSI is listed on the Symmetry.(At present, we use Symmetry DeFi Tools for swap function, however they haven’t provided API, so we are contacting other projects to integrate Token into DEX. After this users can normally buy our products).
Notice: in the beginning of MSI launching, the liquidity of the $MSI pool will be very low. At this time if you buy a big amount of MSI will cause the fluctuation of the token price away from its initial value. In this case we don’t suggest you buy a big amount of MSI (>$3000), otherwise it will cause a high slippage to lose your asset.
2) MINT $MSI(suitable for big amount ≥$3,000)
There are two steps:
First, convert your SOL into WSOL if your wallet has no wSOl.If you don’t have the other 7 tokens, please buy it on the “Buy” Button.
(Due to limits on Solana transaction sizes, this step is required to create wrapped SOL (wSOL) in your wallet before swapping.)
Then, mint 8 Tokens for MSI.
You need to have the component 8 Tokens in your wallet when you want to create $MSI shares by MINT. Input the desired amount and UI will calculate the demand 8 Token amounts. The transaction will succeed once you have enough Token amounts. The smart contract will deposit 8 Tokens into MSI smart contract pool, at the same time will MINT the corresponding $MSI share to your wallet.
How to sell MSI
There are also 2 ways to sell MSI:
One is to sell MSI directly on Solana DEX such as Raydium or MatrixETF APP
By using MatrixETF APP, it needs the Symmetry integrate our Token in DEX(recently we are on the process of communication, after completing this workflow, users can buy our products normally).
Notice: This method to sell MSI will cause a high slippage when the liquidity is low in the $MSI pool. Please consider the sell cautiously when there is a high slippage.
Another way is Redeem MSI to a basket corresponding component Tokens.
Compared to other Indexes, there are no additional fees on MatrixETF Index such as Mint fee, Governance fee or Trade fee etc,. There is only a 0.7% Redeem fee on Matrix Index we will charge when you Redeem MSI.
This fee points to the arbitrageurs who arbitrage MSI instead of selling it directly. Once they find there is a spread between MSI trade price and net value, they will destroy the corresponding basic assets to gain profits by selling them in the crypto market.
We allow the Matrix Community to obtain part of arbitrageur’s profits, which will be deposited into the Matrix Treasury. Community DAO will decide the final usage of the Redeem fee.
In traditional finance, ETF provides diversified choices and more freedom to ordinary users. We are pretty sure that MSI can provide users with various portfolios and save gas fees in the crypto market, furthermore to provide an opportunity to buy/sell /hold in the Solana ecosystem by single token.
For the beginners, if you are interested in the Solana ecosystem developing trend and prospect, and want to invest in the Solana eco with a low cost method. MSI will be a perfect investment chance for you to distribute asset risks and gain better incomes.