CIP #17 - Yield-Bearing Mega Cap Index on BNB Chain

Status: Proposed
Discussion link: Yield Bearing Mega Cap Index on BNB
Created: 2/19/22

Executive Summary

Price volatility has been a constant theme in cryptocurrencies since inception, consequently crypto holders seek creative ways to hedge individual token price risks while searching for yield. To achieve these, some people choose mega cap projects that are more resilient. Similarly, another section of investors may choose to buy into Indexed funds, while others deposit their crypto holdings into interest-yielding lending pools.

In a bid to improve the chances of hodlers to achieve optimized returns with significantly reduced risks, a single index that combines multiple risk reducing components is therefore much needed.

Proposed Solution

Create a yield-bearing Mega Cap Index on the BNB Chain.

The Mega Cap Index will encumber the two largest cryptocurrency in the world by market capitalization and global adoption rates - Bitcoin and Ethereum as underlying tokens.

Yield-Bearing Mega Cap Index Components

  • Interest Bearing BTC (BTCB deposited in Alpaca finance)
  • Interest Bearing ETH (ETH deposited in Alpaca finance)

Rationale

By creating a Mega Cap index composed by the two largest market cap crypto, the index will provide a unique asset class for BNB chain users. Here are a few other prime reasons for introducing this index:

  • Mega Cap projects that are more resilient and resistant to market volatility.
  • Mega Cap index is a much safer portfolio for holders.
  • It can be very useful for DeFi players who need to use BTC and ETH-backed assets to access DeFi services to also earn passive income from their holdings.
  • Rather than simply holding wETH and wBTC as collateral, DeFi merchants and custodians can as well put the funds into Alpaca Finance lending pool to earn interest over time.

Specifications

  • The Interest Bearing BTC (BTC deposited in Alpaca lending pool) and Interest Bearing ETH (ETH deposited in Alpaca lending pool).

The allocation of funds between Interest Bearing BTC and Interest Bearing ETH shall be strictly based on Market Cap.

1 Like

I commented yesterday the discussion about create a yield-bearing Mega Cap Index asset class on the BNB Chain.
Happy to see it in CIP # 17.
For sure I will vote for that.

Mega Cap Index that includes BTC and ETH is like a basic need. BTC and ETH is a bluechip in crypto. Definitely a β€œYES” from me