SoSoValue Indices(SSI)

Indices Methodology

1. Introduction

1.1 Index Objective

SoSoValue Indices (SSI) measure the performance of various sectors within the cryptocurrency market. These indices are designed to effectively track the market fluctuations and trends across various sectors, aiming to provide investors a clear and comprehensive perspective on the performance of the cryptocurrency market.

1.2 Index Principle

1. Objectivity

The compilation and maintaince of the indices are grounded in a methodical approach to data analysis, underpinned by well-defined quantitative benchmarks.This strategy aims to avoid personal biases and intereference from external pressure. The selection of constituent tokens, allocation weighting, and calculation methods are all based on anchored in empirical market data and impartial indicators. Changes or updates to the indices are methodically executed according to preset rules and standards, which are complemented by ongoing, real-time assessments of market trends and behaviors.

2. Transparency

The procedures for compilation and maintaince of the indices are designed to be completely transparent to all market participants. This openness ensures that participants have a thorough comprehension of the indices' structure and the methodologies employed in their operation. Prior to implementing any modifications—whether adding or deleting constituent tokens, adjusting their weights, or altering calculation methods—detailed announcements will be made. These communications will provide comprehensive insights into the rationale behind the changes and discuss their expected effects on the indices.

3. Representativeness

The process for selecting constituent tokens involves a rigorous evaluation based on both quantitative metrics and qualitative assessments. These criteria include, but are not limited to, market capitalization, liquidity levels, technological advancements, and a token's prominent role in its respective sector. The indices have been meticulously constructed to accurately represent the general performance of the cryptocurrency industry as well as that of specific sectors within it.

4. Flexibility

In acknowledgment of the cryptocurrency market's significant volatility and rapid evolution, the indices are designed with the flexibility to adjust to new trends and technological breakthroughs. To maintain their relevance and accuracy, the indices will undergo regular evaluations and modifications. These periodic reviews ensure that the indices accurately mirror the current conditions and dynamics of the cryptocurrency market.

1.3 Index Series

Utilizing the advanced data analysis and research facilities provided by the SoSo Value platform, we have carefully chosen the most promising niche sectors for the introduction of our initial series of 12 sector indices.

• SoSoValue Layer1 Index

• SoSoValue Layer2 Index

• SoSoValue DeFi Index

• SoSoValue RWA Index

• SoSoValue CeFi Index

• SoSoValue Payment Index

• SoSoValue Meme Index

• SoSoValue DePIN Index

• SoSoValue AI Index

• SoSoValue GameFi Index

• SoSoValue NFT Index

• SoSoValue SocialFi Index

2. Eligibility Criteria

2.1 Eligibility Factors

• Trading in U.S. dollars or U.S. dollar stablecoins: The token must have at least one trading paris with one of USD、USDT、USDC or DAI

• Traded on qualified exchanges: Qualified exchanges include Binance, Coinbase, OKEx, Kraken, Bybit and Bitget. A constituent token must be traded on at least one qualified exchange and must have been listed for trading on one of these exchanges for at least 90 trading days.

• Free-floating prices: Excludes cryptocurrency tokens pegged to other assets, including but not limited to legal tenders, physical goods, reserves, and algorithmic stablecoins.

• Liquidity requirements: For all tokens in the market that meet the above criteria, calculate the 30-day average daily trading volume and rank them, excluding the bottom 40%.

• Market capitalization requirements: The 30-day average circulating market capitalization of the token must not be less than 100 million U.S. dollars.

2.2 Sector Indices Classification Principle

Eligible tokens will be classified according to the following criteria:

3. Index Construction

3.1 Constituent Selection

• Each sector index will include 5 constituent cryptocurrencies.

• If the number of cryptocurrencies eligible for inclusion in a given period exceeds 15, the number of constituent cryptocurrencies in the sector index will increase to 10.

• Within each sector, eligible cryptocurrency tokens will be ranked by their 30-day average circulating market value, with the top 5 or top 10 being selected. If two cryptocurrencies have the same average circulating market value, the one with the higher 30-day average trading volume will be chosen.

3.2 Constituent Weightings

• All constituent tokens in each indices are weighted according to their circulating market capitalization.

3.3 Index Calculation

Let $P_i$ be the market price of the $i^{th}$ cryptocurrency, $S_i$ be its circulating supply, and $N$ be the total number of cryptocurrencies in the index. Then, the circulating market capitalization $M_i$ of the $i^{th}$ cryptocurrency is calculated as:

$M_i = P_i \times S_i$

Let $T$ be the total circulating market capitalization of the index, calculated as:

$T = \sum_{i}^n M_i$

Then, the original weight $W'_i$ of the $i^{th}$cryptocurrency in the index is calculated as:

$W'_i = \frac { M_i} { T }$

Define the price change rate $R'_i$ as:

$R_{i,t} = \frac { P_{i,t} }{ P_{i,0}}$

where：

$P_{i,t}$ is the price of constituent token $i$ on day $t$

$P_{i,0}$ is the price of constituent token $i$at the base period

Calculate the overall index's weighted price change rate $R_{weighted,t}$ as:

$R_{weighted,t} = \sum_{i}^n ( W_{i,0} \times R_{i,t})$

Here, $W_{i,0}$ is the weight of constituent token $i$ at the base period.

Calculate the index value on day $t$ as:

$I_t = I_0 \times R_{weighted,t}$

3.4 Consituent Pricing

• For the calculation of index weightings, the price of the constituent tokens at UTC 0:00 on the rebalancing implementation day will be used.

4. Index Maintenance

4.1 Rebalancing

The indices undergoes rebalancing each month, which may include changes to its constituent tokens and the recalculation of weightings based on the latest list of constituent tokens from each sector and their most recent circulating market values.

The new constituent coins and their weights will be announced on the third-to-last calendar day of the current month, designated as the adjustment announcement day.

The new constituent coins and their weights will be implemented by the first calendar day of the following month, designated as the adjustment implementation day.

4.2 Additions and Deletions

Re-ranking of the constituent tokens from each sector based on the latest circulating market capitalization. For indices with 10 constituent tokens, existing constituents ranked below 12th will be removed from the index, while those ranked 8th or higher will be added. The final number of constituents to be removed or added will be determined based on market capitalization rankings to maintain a total of 10 constituent tokens. For indices with 5 constituent tokens, existing constituents ranked below 7th will be removed from the index, while those ranked 3rd or higher will be added. The final number of constituents to be removed or added will be determined by market capitalization rankings to maintain a total of 5 constituent tokens.

4.3 Base Data

Index	Tic	Base Date	Base Number
SoSoValue Layer1 Index	ssiLayer1	2024/01/12	10.00
SoSoValue Layer2 Index	ssiLayer2	2024/01/12	10.00
SoSoValue DeFi Index	ssiDeFi	2024/01/12	10.00
SoSoValue RWA Index	ssiRWA	2024/01/12	10.00
SoSoValue CeFi Index	ssiCeFi	2024/01/12	10.00
SoSoValue Payment Index	ssiPayment	2024/01/12	10.00
SoSoValue Meme Index	ssiMeme	2024/01/12	10.00
SoSoValue DePIN Index	ssiDePIN	2024/01/12	10.00
SoSoValue AI Index	ssiAI	2024/01/12	10.00
SoSoValue GameFi Index	ssiGameFi	2024/01/12	10.00
SoSoValue NFT Index	ssiNFT	2024/01/12	10.00
SoSoValue SocialFi Index	ssiSocialFi	2024/01/12	10.00

5、Data Distribution

To ensure the wide accessibility and timeliness of the SoSo Index, it will be consistently updated and made available 24/7 through the SoSo Value platform.

Appendix I: Glossary

Circulating Market Cap: Circulating market capitalization is a key metric for measuring the overall market value of cryptocurrency. It is calculated by multiplying the number of freely tradable cryptocurrencies in the market (i.e., circulating supply) by their current market price.

Daily Trading Volume: Daily trading volume reflects the level of activity and market interest in cryptocurrency during a given time period and is an important indicator of market liquidity and investor engagement. It refers to the aggregate monetary value of all executed transactions completed for a specific cryptocurrency during a 24-hour trading cycle.

Appendix II: Document Revision History

Timing	Description
2024/04/18	Initial version. Members of the public are invited to review and provide their feedback on the document.

Copyright Notices& Disclaimer

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This cryptocurrency index methodology document (hereinafter referred to as the "Document") and its contents are provided solely for reference purposes and do not constitute any investment advice, recommendation, or invitation. All data, analysis, and index compilation methods mentioned in the Document represent the views of the authors or compilers at the time of publication, and are based on information sources believed to be reliable. However, the authors or compilers do not guarantee the accuracy or completeness of such information and shall not be liable for any direct or indirect losses resulting from the use of the contents of this Document.

Investing in cryptocurrencies and cryptocurrency indices involves high risks, including but not limited to market volatility, price changes, technical vulnerabilities, and changes in laws and regulations. Investors should conduct their own risk assessment before making any investment decisions and, if necessary, consult independent financial and legal advisors.

The right to interpret and amend this disclaimer belongs to SoSo Value. Any modifications to this disclaimer will be updated on the SoSo Value platform and will take effect from the date of announcement.