The TokenDAO Core Portfolio is a strategy designed to track the overall performance of the Layer-1 (base network) cryptocurrency market. The portfolio is weighted based on a combination of capitalization weighting, equal weighting, and portfolio optimization algorithms. The TokenDAO Core Portfolio aims to be a core holding within any diversified cryptocurrency portfolio.

The token must be representative of a Layer-1 blockchain or sidechain. The token must have a tradable ERC-20 token representation on the Ethereum blockchain and can be in any form if there exist adequate liquidity available, reasonable transaction costs, and low tracking error. Tokens with low liquidity, high transaction costs, or high tracking error are excluded. The token must not be considered a security by corresponding authorities across different jurisdictions.

Rebalancing follows a percent-range rebalancing approach that involves setting rebalancing thresholds or trigger points, stated as a percentage of the portfolio’s value, around target values. This approach is intended to keep turnover and network fees low. Rebalanced weightings are computed using a combination of capitalization weighting, equal weighting, and portfolio optimization algorithms.

TokenDAO’s structured crypto products are built using Set Protocol smart contracts. Our tokens have the following features:

• ERC-20 standard
• Fully-collateralized by the underlying
• Can be issued/redeemed similar to ETFs
• Can earn swap from fees from liquidity pools
• Trustless, open-source
• Tradable in the secondary market

For a more detailed explanation, refer to the Set Protocol whitepaper.

For more information about product risks, refer to TokenDAO’s Documentation.