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dHedge Launches A Tokenized Index For Tracking Its Top Traders

The decentralized fund management service dHedge has launched a particular tokenized index. It will track the performance of the top 10 managers on the platform and display the overall result.

Also, it is planned to issue a unique token based on the ERC-20 standard in the future. It can be used for automated market making on decentralized exchanges (DEX).

With the DHedge platform, fund managers can launch actively managed investment pools. They may contain synthetic financial instruments based on the Synthetix protocol.

Henrik Andersson, the creator of dHedge and chief investment officer of Apollo Capital, said:

The main goal of our service is crowdsourcing of the best crypto traders on the Internet. And what could be better than building an index with open data?

The new index is called dHEDGE Top Index or dTop. It will balance the investment portfolios of the top 10 fund managers on the platform. Moreover, the automated index will cover gas costs for balancing. It will be done with dHedge DAO funds.

It is also planned to distribute 10% of the commissions received among traders. The amount of the reward will depend on the individual manager’s influence on the index.

To assess dHedge pool managers’ effectiveness, the Sortino coefficient is used – an indicator that evaluates profitability and risk. This number also considers the pool size, risk profile, and historical fluctuations in a decentralized fund management service.

Henrik Andersson calls the choice of the risk-adjusted indicator deliberate. “We believe it’s important not just to look at the pool’s profit, but all the results in aggregate,” said the creator of dHedge.

$50,000 was spent on launching the dTop pool. However, the developers believe that even more investments will be made in the new index very soon.

After dHedge completed its testing phase in the summer of 2020, it raised and blocked about $30 million. At the same time, during the platform’s existence, transactions were concluded for a total of $400 million.

The developers expect to launch even more indexes soon. They are studying the possibilities and sentiments of the site users for the protocol’s future scaling. According to Andersson, dHedge should only be helpful, so no one will thoughtlessly expand the functionality.

Formerly renowned trader and DataDash creator Niklas Merten stated that the DHT token is one of the most promising assets in 2021. He attributed this to a general increase in interest in the DeFi industry. Further, Merten noted the support of dHedge by some major decentralized projects, including Framework Ventures, DeFiance Capital, Alameda Research and many others.

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