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How to Gain Exposure to DeFi Indices on Notum

By Kate

Jan 11, 20248 min read



Over the past few years, investing in cryptocurrency has become one of the most popular ways to earn passive income. Since there are now a huge number of strategies, everyone, from beginners to experienced investors, can choose the right option for generating additional income. One investment option that is rapidly growing in 2023 is DeFi indexes, which allow users to gain diversified access to DeFi projects through one convenient token.

When creating DeFi indices, smart contracts automatically manage the investment portfolio, balancing it according to established rules.

Thus, this strategy provides investors with the opportunity to purchase index tokens, which represent a share in a portfolio of assets, and accordingly receive income from the growth in the value of these assets. This investment method is a fairly simple way to generate passive income without actively managing various tokens and projects. Today's article from Notum will tell you about the Index Coop project, which allows you to gain exposure to DeFi indices, its advantages, risks, and perspective strategies for generating income.

Source: IndexCoop

Index Coop: Essentials

  • TVL: $70,180,000
  • Risk Level: Medium
  • BlockchainsEthereum and EVM-compatible networks
  • Foundation Date: Oct, 2020

The Index Coop is a project that was launched on October 6th, 2020 by Set Labs as a decentralized autonomous organization to create and maintain crypto-native structured products. However, since its inception, it has undergone changes and is now a project consisting of core contributors INDEX investors, and supporters. As a DAO, Index Coop is still creating secure and accessible products using a decentralized network.


The Index Cooperative project consists of DeFi experts, financial specialists, and engineers providing access to various digital assets through index products that automatically adjust to market changes.

The crypto index products themselves are in many ways similar to traditional market indices, as they also track specific topics, namely Decentralized Finance and others. One of the most popular crypto indices is the DeFi Pulse Index, which tracks the performance of decentralized finance tokens. DPI was created by Index Cooperative and its main goal is to provide users with a convenient way to gain diversified exposure to DeFi without the need for active portfolio management. Another popular index offered by Index Coop is the Metaverse Index.

“The Metaverse index (MVI) is designed to capture the trend of entertainment, social activity and business moving to take place in virtual economies, powered by NFTs and blockchain technology” – IndexCoop.

The DeFi Pulse Index is a way to diversify a portfolio with assets representing different protocols and projects in the DeFi field. Index creators not only define a management strategy but create smart contracts that automatically manage the portfolio in accordance with that strategy.

At the moment, Index Coop is a project that supports the best crypto indices on the market and simplifies the purchase of digital assets as much as possible.

The way Index Coop works is to help users generate income by holding an index token that represents a stake in underlying assets. As the value of the underlying assets increases, so does the value of the index token. Thus, users benefit from a simple way to acquire and hold digital assets. After product’s most recent launch of the Index Coop CoinDesk ETH Trend Index, their products cover 4 categories: sector, leverage, yield and automated strategy.

Why Use Index Coop?

DeFi indices is a fairly innovative approach to portfolio diversification in DeFi and has several main advantages that become even more attractive thanks to Index Cooperative:

  • Automated portfolio management. Since DeFi indices are created using smart contracts, they offer rebalancing and automatic inclusion/exclusion of new projects into the index without the need for active investor participation. In addition, DeFi index smart contracts can regulate asset allocation, and participate in various financial transactions such as staking and liquidity provision. Index Coop's automation saves investors time by giving them the ability to monitor the market without constant intervention.
  • Simplicity of products. While many income generating strategies can be difficult to understand, Index Coop strives to make the user experience as simple as possible and provide every investor with access to crypto products.
  • Portfolio diversification. Since DeFi indices can be described as a pool of different DeFi projects and tokens, allocation of indices through Index Coop allows you to diversify your portfolio by spreading risk across different assets. In this way, users reduce the risk of failure and the impact of market conditions on overall profits.
  • Participation in the DeFi ecosystem. The decentralized finance market is growing and developing quite quickly, attracting more and more users and investors every year. Thus, DeFi indices with Index Coop allows users to participate in the growth of this sector while receiving rewards.
  • Liquidity. Since DeFi indices are a liquid asset and traded on various DEXs, users can quickly and seamlessly buy or sell them without the restrictions associated with the traditional financial sector.

Index Coop: Investment Strategies

Today we will look at two popular strategies that allow users to earn passive income on Index Coop without being actively involved in the process:

DPI on Ethereum 
Total APY - 0.00%, TVL - $25m

As you know, the DeFi Pulse Index or (DPI) tracks the performance of DeFi tokens depending on their market capitalization. The DPI index structure caps each token exposure at 25%, which not only ensures risk management but also improves the diversity of your portfolio. 

“Any excess weight above 25% that would have been allocated to the token is redistributed to the remaining components of the DeFi Pulse Index on a proportional basis.” – Notum.

Source: Notum

MVI on Ethereum 
Total APY - 0.09%, TVL - $5,6m

The Metaverse index is another DeFi index token from Index Coop, based on blockchain and NFT technologies. MVI shows trends in the development of business, entertainment and social activity in the virtual economy. To obtain the final weights, the index uses a combination of market cap and DEX liquidity. MVI can be a profitable option as it diversifies the evolving digital landscape and balances its impact on the Metaverse.

Source: Notum

How Risky Is Index Coop?

The products offered by Index Coop are built on one of two protocols - Set Protocol v2 or Index Protocol. The project’s website itself states that protocol security is a top priority for their DAO, so Set Labs and Index Coop pay due attention to this. Both of these systems have been tested by different security firms and undergone several audits, such as Sherlock, OpenZeppelin, ABDK and others.

However, Index Coop, like most DeFi projects, is subject to some risks that you should pay attention to before investing in indices:

  • Market volatility. As you know, the cryptocurrency market is quite changeable and subject to price fluctuations, which means DeFi indices are also a volatile asset.
  • Smart contracts. Since Index Coop uses smart contracts for automatic portfolio management and other functions, it is also subject to smart contract risks such as vulnerabilities, bugs, and others that can lead to loss of funds.
  • Changes in DeFi protocols. Since the developers of Set Protocol v2 or Index Protocol may make changes to the structure of the protocols, this may have an impact on the reward structure, terms of use, commissions, investment returns, and more.

Index Coop Token (INDEX)

  • Total supply: 10,000,000 INDEX
  • Maximum supply: 10,000,000 INDEX
  • All-time high INDEX coin price: $133.14
  • All-time low INDEX coin price: $0.7946

Index Coop has its own governance token, INDEX, which is used to vote on various project proposals. Thus, holders of the $INDEX token can both influence changes in existing Index Coop projects and vote for new products. In addition, token owners can influence the distribution of funds and manage external protocols. INDEX is a PoS token and was originally deployed to the Ethereum mainnet. As of December 27, 2023, the Index Coop token price is $3.50 according to Coin Market Cap.

Source: IndexCoop

Notum’s Verdict

Index Coop is a project that, since 2020, has been offering users affordable and secure products in the field of decentralized finance. The index products offered by the platform automatically adapt to market changes and require a low level of user involvement to receive rewards. A notable feature of the platform is the creation of the DeFiPulse Index, which provides users with a simple and convenient way to gain diversified exposure to DeFi without actively engaging in the process.

Despite the underlying risks of smart contracts and market volatility, the platform is quite secure due to the security checks and audits carried out. Thus, Index Coop builds simple, but powerful index tokens that make the best of DeFi more accessible. An automated portfolio management system, ease of use, and user-friendly interface make Index Coop a great solution for those wishing to gain exposure to DeFi indices.

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Disclaimer: Notum does not provide any investment, tax, legal, or accounting advice. This article is written for informational purposes only. Cryptocurrency is subject to market risk. Please do your own research and trade with caution.


  1. What is an index?

    An index is a portfolio that combines several different cryptocurrencies. The purpose of the index is to track changes in the value of the crypto market as a whole and its sectors, and not of an individual coin or token.

  2. How are DeFi indices useful?

    DeFi indices perform several functions, the main of which are portfolio diversification, tracking the decentralized finance market, assessing the performance of various DeFi projects and assets, and reducing risk by distributing funds between different assets.

  3. What is the DeFi Pulse index?

    The DeFi Pulse Index or DPI is an index created by Index Cooperative that tracks the performance of decentralized finance tokens.

  4. How does DeFi Pulse Index work?

    The DeFi Pulse Index selects and weights tokens based on their market capitalization, and automatically adjusts its composition through rebalancing to reflect changes in the DeFi market.

  5. How to invest in the DeFi Pulse index?

    Users can invest in the DeFi Pulse index directly on the Index Coop platform by purchasing tokens, or on other trusted platforms such as Notum.