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As the launch date for parachains nears, a new initiative is constructing a decentralized finance (defi) index token that tracks Polkadot projects aimed at helping investors diversify their holdings through a single instrument.
Six Projects Provide Soft Commitments to Join Polkadot Index Network Token
The growing interest in Polkadot and its novel parachains has seen the blockchain’s native token become the source of frenzied speculation over the last few months, joining the list of the top ten cryptocurrencies by market capitalization.
Now, with approaching parachain launches for several projects, two organizations are taking steps to help improve access to the ecosystem’s opportunities through the Polkadot Index Network Token (PINT).
Chainsafe, a protocol and infrastructure development firm, is collaborating with Stateless Money, a staking service provider, to bring this new index fund and accompanying token to fruition.
The PINT token will be governed by a seven-member expert group called the PINT Council and a Constituent Committee formed of members of each project featured within the index. These two groups will oversee the index and take on specific roles like determining the index composition.
Already, projects are lining up to join this new initiative, both as index components and part of the Constituent Committee. So far, PINT has received soft commitments from major ecosystem projects, including Acala, Equilibrium, Hydradx, Litentry, Moonbeam, and Plasm, helping further the index token’s appeal.
A New Standard in Defi
From inception to the present, this new index has represented a very unique undertaking in the blockchain ecosystem. Staker DAO, an on-chain governance protocol, brought its Polkadot Index Network Token proposal to its community for a vote. Despite being for the Polkadot ecosystem, voting occurred on both the Ethereum and Tezos blockchains, which operate competing ecosystems.
In the time since Staker DAO first requested an index token feasibility study in late 2020 from Chainsafe and Stateless Money, a Staker DAO governance proposal was submitted in March and approved by the community in early April.
This approval established that Chainsafe would be the party responsible for developing the token’s Substrate pallets over the next three months. In the meantime, Stateless Money will take the lead in coordinating the project.
For Polkadot ecosystem participants and external investors, this new initiative promises substantial benefits. In terms of investor advantages, the idea of gaining broad, diversified exposure to high-profile Polkadot projects without the need to allocate individually to each project is enticing.
On the other side, Polkadot projects can leverage PINT by allocating a certain portion of their respective parachain’s tokens. This entitles parachains to help from the PINT Treasury, which can help finance expensive Parachain Lease Offerings. This service can also help parachains manage native token volatility.
Do you see yourself using PINT as an investment instrument? Let us know in the comments section below.
Image Credits: Shutterstock, Pixabay, Wiki Commons
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