SharesPost Announces SharesPost Token Index, Designed to Track ERC-20 Token Growth

SharesPost announced crypto token index named SharesPost Token Index, claimed to be first of its kind and designed to track ERC-20 token market growth.

The index is based on select ERC-20 protocol tokens. It uses factors such as market capitalization and trading history to assign a weight to each token based on price and circulating supply. Sharepost claims its token index accurately reflects the crypto market in real-time on daily basis. It helps in minimizing liquidity risks and transaction costs.

SharesPost Founder and CEO Gregory Brogger said: “As interest in cryptocurrencies and blockchain continues to rise, we saw a need to provide a meaningful measure of token performance to help inform investor decisions and make the market more comprehensible for everyday people. Our resulting growth Index addresses this need, while reflecting our larger mission of providing liquidity to the private growth asset class through trading, asset management, research, and data.”


According to the whitepaper, SharesPost Token Index include top 15 ERC-20 tokens by market capitalization meeting below criteria,

1. Average market capitalization (*) of at least $75 million in the 12 weeks prior to each quarterly rebalance
2. The average daily trading volume of at least $1 million in the 12 weeks prior to each quarterly rebalance
3. At least 45 days of trading history.

Market capitalization formula is used to calculate a total value based on daily pricing data.  Market capitalization is defined by the average daily token price multiplied by the number of tokens in its circulating supply of each quarterly rebalance.

Sharepost Token Index draws upon the volume-weighted average price of each token from a whitelist of exchanges. The list of whitelisted exchanges is less than or equal to ten (10). The tokens selected for the Index considering their overall representation in the blockchain or crypto sector, the project credibility and their utility function.

PC: Snip from https://sharespost.com/downloads/SharesPost_Token_Index_White_Paper.pdf

SharesPost Token Index does not use ETH as a part of the index but the value of ETH affects the participating token constituents in Sharepost Token Index. It should be noted that ETH is the virtual currency used on the Ethereum platform for transactions, where most of the ERC-20 token reside. Having said that, this statement not true for all ERC-20 tokens.  The way ERC-20 tokens differ from Bitcoin or other non-ERC-20 cryptos is that they offer special functionalities such as smart contracts. Smart contracts are self-executing code that enforces contract specifications once certain conditions are met.

According to a blog post by Rohit Kulkarni, Managing Director, Private Investment Research for SharesPost Research LLC, "In the year 2017, the total value of tokens grew to $37.7 billion, a nearly 19,000 percent increase over the prior year. Companies and investors raised over $6 billion last year through initial coin offerings, a mark they have already matched this year, with still another quarter to go. To appreciate the rapid growth of token sales, consider that U.S. startups (i.e., seed and Series A) in 2017 raised an estimated $8 billion using traditional private placement."

As noted in the announcement, SharesPost Token Index has grown 17 percent since October 2017. In the same period, Ethereum dropped 17 percent and Bitcoin increased by 59 percent. This is despite crypto market facing a volatility in the recent months. Using July 1, 2018, as the baseline, SharesPost reviewed the Index’s performance back to Q3 2017 and compared the data to Bitcoin and Ethereum prices.

Head of Research for SharesPost, Inc, Rohit Kulkarni said, “As more institutions continue to dive into the crypto world, a consistent and comprehensive tool for analyzing tokens is integral to effectively evaluate and interpret the market. Our mission is for the SharesPost Token Index to be that tool, providing much-needed clarity to a nascent and ever-evolving industry, ”

You can refer to Sharepost Token Index Whitepaper here.