According to Bloomberg’s announcement on Thursday, the firm has entered into a strategic partnership with Galaxy Digital Management. The partnership will help expand their crypto offerings to measure the decentralized financial space’s performance.
Bloomberg announced on Thursday that it will develop an index alongside Galaxy Digital that would track nine distinct decentralized finance, or DeFi, projects.
Uniswap (UNI), Aave (AAVE), Maker (MKR), Compound (COMP), Yearn.Finance (YFI), Synthetic (SNX), SushiSwap (SUSHI), 0x (ZXR), and Uma (UMA) were among these ventures as of Aug. 1. .
“Decentralized finance is emerging as the next significant investing issue within crypto,” said Alan Campbell, head of product management at Bloomberg’s multi-asset index division.
“As the demand for liquidity and institutional custody solutions grows, DeFi is becoming a more appealing option for institutional investors.”
The DeFi assets were chosen, according to Bloomberg, “based on institutional trading and custody readiness” in the United States, as well as the “quality of pricing.”
According to the news site, no single project will ever account for less than 1% of the index’s overall worth, but no more than 40%.
Galaxy Fund Management, Galaxy Digital’s funds arm, will also offer its own passively managed fund, DEFI, that will mirror the performance of Bloomberg’s.
Bloomberg and Galaxy Digital first joined to build a joint crypto benchmark index three years ago, and the news comes three years later.
The index began tracking ten cryptocurrencies from the “largest, most liquid portion” of the market in May 2018, including Bitcoin (BTC) and Ether (ETH) (ETH).
Bloomberg and Galaxy Digital’s new DeFi index comes after fund manager Bitwise launched a DeFi Crypto Index Fund in February.
Despite 46.4 percent returns in the last month, Bitwise’s net asset value has decreased by 8.6 percent since its creation.
