CoinRisqLab 80 Index - Methodology

How we calculate the CoinRisqLab 80 Index

Overview

The CoinRisqLab 80 is a market-capitalization weighted cryptocurrency index that tracks the performance of the top 80 cryptocurrencies. This index provides a comprehensive view of the cryptocurrency market by focusing on the most significant assets while excluding stablecoins, wrapped tokens, and staked tokens.

Similar to traditional financial indices like the S&P 500, the CoinRisqLab 80 uses market capitalization weighting, meaning larger cryptocurrencies have a proportionally greater influence on the index value. This approach reflects actual market size and liquidity, automatically adjusting to market movements without arbitrary weighting decisions.

Glossary

Market Capitalization

The total market value of a cryptocurrency, calculated by multiplying its current price by its circulating supply.

Market Cap = Price × Circulating Supply

Index Level

A numerical value representing the overall performance of the index, starting from a base level of 100. Changes in the index level indicate the percentage change in the total market capitalization of the constituents.

Divisor

A constant value used to normalize the index to the base level of 100. The divisor is calculated once at initialization and remains constant unless manually adjusted for methodology changes.

Constituent

A cryptocurrency included in the index. The CoinRisqLab 80 Index has up to 80 constituents selected based on market capitalization and exclusion criteria.

Stablecoin

Cryptocurrencies pegged to fiat currencies (like USDT, USDC) that are excluded from the index as they don't reflect crypto market dynamics.

Wrapped Token

Derivative representations of existing assets (like WBTC for Bitcoin) that are excluded to avoid double-counting.

Staked Token

Tokens representing staked assets (like stETH for staked Ethereum) that are excluded to prevent double-counting.

Base Parameters

Parameter	Value	Description
Index Name	CoinRisqLab 80	Official name of the index
Base Level	100	Starting index level
Max Constituents	80	Maximum number of cryptocurrencies in the index
Update Frequency	15 minutes	Configurable recalculation interval

Constituent Selection

The selection process follows three main steps to identify the top 80 cryptocurrencies:

Step 1: Market Data Retrieval

We retrieve the most recent market data for all cryptocurrencies, filtering for:

Only cryptocurrencies with Market Cap > 0
Latest timestamp per cryptocurrency
Sorted by market capitalization (descending)

Step 2: Exclusion Filtering

We exclude specific types of cryptocurrencies to ensure the index accurately represents the true cryptocurrency market:

Type	Reason	Examples
Stablecoins	Pegged to fiat, don't reflect crypto dynamics	USDT, USDC, DAI
Wrapped Tokens	Derivative representations of existing assets	WBTC, WETH
Staked	Would create double-counting	stETH, rETH

Step 3: Final Selection

After applying all filters, the top 80 cryptocurrencies by market capitalization are selected as index constituents.

Index Calculation

The index calculation follows a mathematical formula that ensures the index reflects the true market performance:

1. Divisor Initialization

The divisor is calculated only once during the first execution to anchor the index to the base level of 100:

Divisor = Initial_Total_Market_Cap / Base_Level

Divisor = Initial_Market_Cap / 100

Note: The divisor remains constant unless manually adjusted for methodology changes.

2. Total Market Capitalization

Calculate the sum of all constituent market capitalizations:

Total_Market_Cap = Σ(Price_USD × Circulating_Supply)

for all 80 constituents

3. Index Level Calculation

Divide the total market cap by the divisor:

Index_Level = Total_Market_Cap / Divisor

Complete formula:

                n=80
                Σ  (P[i] × Q[i])
               i=1
Index_Level = ─────────────────────
                     D

Where:
  P[i] = USD price of cryptocurrency i
  Q[i] = Circulating supply of cryptocurrency i
  D    = Divisor (constant)
  n    = 80 constituents

Constituent Weights

Each constituent's weight in the index represents its proportion of the total market capitalization:

Weight[i] = (Market_Cap[i] / Total_Market_Cap) × 100

Where: Market_Cap[i] = Price_USD[i] × Circulating_Supply[i]

Weights are expressed as percentages
All weights sum to 100%
Larger market cap cryptocurrencies have proportionally higher weights
Weights automatically adjust with price movements

Calculation Example

Initial Setup

Assume 80 selected cryptocurrencies with:

Total Market Cap: $2,500,000,000,000 ($2.5 Trillion)

Base Level: 100

Calculated Divisor: 2,500,000,000,000 / 100 =

25,000,000,000

Subsequent Calculation

Later, the market has grown:

New Total Market Cap: $2,750,000,000,000 ($2.75 Trillion)

Divisor: 25,000,000,000 (constant)

New Index Level: 2,750,000,000,000 / 25,000,000,000 =

110

This represents a 10% increase from the base level, directly reflecting the 10% growth in total market capitalization.

Maintenance & Rebalancing

Automatic Rebalancing

The index automatically rebalances on each calculation (every 15 minutes):

Constituents may enter or exit based on market cap ranking
Weights adjust automatically based on price movements
No manual intervention required

Divisor Adjustments

The divisor should only be manually adjusted for:

Corporate actions (splits, mergers)
Methodology changes
Index reconstitution events

Note: Manual divisor adjustments are rare and documented for transparency.