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The Gitcoin Staked ETH Index (gtcETH) is an index token of the leading Ethereum liquid staking tokens. In addition to a methodology that encourages decentralization, gtcETH shares staking rewards with Gitcoin in support of public goods funding.
Specification
The objective of gtcETH is to enable token holders to access the top ETH liquid staking tokens with a single token while simultaneously contributing to public goods funding.
The methodology is the same as dsETH’s, with a weighting that favors decentralized liquid staking protocols as measured by the number of node operators as well as the distribution of stake across node operators. Constituents are equally weighted before adding a Node Operator Factor, which benefits staking protocols with more active node operators. An HHI (or Herfindahl-Hirschman Index) Factor is then added, which measures the concentration of stake and broader competition amongst active node operators within each protocol.
The 2.00% annualized streaming fee will be split between Gitcoin (1.75%) and Index Coop (0.25%).
Token Inclusion Criteria:
Liquid staking tokens:
- Available on the Ethereum blockchain
- Minimum of $25m secondary market liquidity on Ethereum main net
- Competitive APR relative to alternatives
Staking protocols:
- Audited and reviewed by security professionals to determine that security best practices have been followed
- In operation long enough for the decentralized finance community to arrive at a consensus regarding its safety
- Is open source
- Has Bug bounty program
- Establishes and maintains client diversity amongst node operators
Other liquid staking tokens that meet these criteria can be added to the index over time. No one liquid staking token can exceed 50% of the index.
Rebalancing will be performed semi-annually or every 6 months in an effort to minimize exposure to secondary market pricing for liquid staking tokens before staking redemptions are enabled by the Shanghai update. The Index Coop will be responsible for providing updated weights for the pool at the beginning of each rebalance period, and once the rebalance period begins, swaps will be temporarily enabled in order for the pool to be appropriately arbitraged to the updated weighting. Rebalancing parameters may be revisited after the Shanghai update, including frequency and the pool’s default swap state.
Streaming fee: 2.00% (1.75% to be donated to Gitcoin, .25% is retained by the Index Coop)
Mint fee: 0%
Redeem fee: 0%
The following risks may apply to this digital asset: full or partial loss of digital assets due to technical hacks, exploits, or failures that may occur at the protocol or smart contract level of a product’s infrastructure; restrictions placed on the digital assets by regulatory authorities in the end users region; loss of digital assets or loss of access to the digital assets due to decisions made by centralized providers of the underlying assets; full or partial loss of digital assets through standard product operations which can be hampered by unexpected market conditions; full or partial loss of digital assets due to changes to underlying product assets made by the originating protocols; full or partial loss of digital assets due to volatility, correlation, value at risk, and contagion risks; underperformance of digital assets due to deviation from intended methodology; full or partial loss of digital assets due to the variability and potential volatility of the yield source.
