Try Quests to earn cryptoOne with the OHM - GMI Index
Let's take a look at the relationship between the Bankless DEFI innovation index(GMI) and OHM, with GMI being a protocol that gives investors the opportunity to benefit from the underlying value of the assets held by the index contract with its focus being on high growth startups.
Before we get into the Bankless Defi Innovation Index(GMI) let's take a look at the Bankless DAO the DAO behind the GMI token in partnership with the Index Coop.
The aim or mission of Bankless DAO is to help the world go bankless, with crypto technology offering new ways for investors to store and invest their assets they believe that financial institutions are limited in how they can serve the interest of their customers and want to involve 'the many' in creating a bankless revolution.
The DAO invited Zeus the founder of OHM on their podcast in Oct 2021, link here. On the podcast, they discussed the growth of DEFI and how important it is to have interest-bearing assets individuals can invest in outside the world of traditional finance. Showing the alignment between the goals of Olympus DAO and Bankless DAO.
In order to further the vision of the DAO, Bankless DAO created a number of Index tokens, with the underlying value of each token matching the total cost of the assets in the smart contract holding the assets. The idea is that these index tokens will make it easier for new investors who may not have the time or energy to do thorough research into the different tokens on the crypto market. Index funds are extremely common in traditional finance and are often recommended to new investors who want to benefit from market movements long term as a simpler and less risky way to invest. If you are interested in learning more about Index Funds read more about Index funds here: Investing in Index Funds: What You Need to Know - Investopedia.
Here we can see the value and balance of different tokens in the index, with the value of gOHM being the second largest out of the 16 tokens held. The value of the holdings of OHM is 3 times larger than the smaller held assets held in the index.
GOHM balance has grown over time, with a marked increase in early march where they more than doubled their holding. Unfortunately due to performance of the market as a whole this hasn't translated to an increased price but shows the Index's hope that GOHM is a strong token for the index to hold.
Here we can see how the balance and value of gOHM tokens have done over time, after the first month GOHM tokens in the Index have maintained a value of 80 thousand plus. The sharp increase in value and the amount bought around the launch date of the index shows the protocols hopes for GOHM as one of the leading assets in their Index.
Launched on the 6th of January 2022, the GMI token is an index token holding a number of early-stage defi products in it's smart contract which Bankless DAO and the Index Coop deem to have high potential. Risk management is employed with the assets in the Index being rebalanced bi-monthly to protect its performance. In this article, they explain the ideas behind the token describing Index tokens as DeFI 2.0.
In order to select tokens for the index, they chose tokens which are over 30 million in marketcap but less than 5billion, that are ERC20 tokens with a focus on Ethereum native assets. Currently, GMI holds over 100,000 dollars worth of OHM and has been increasing its balance over time. You can read more about the methodology for the index here: Bankless DeFi Innovation Index.
Let's take a dive into the data associated with the GMI token & its holdings of Olympus Dao's GOHM token.
• Evaluate the average balance and average value held by Bankless Defi Innovation Index(GMI)by selecting the average balance daily & average value of GOHM tokens from the GMI contract: 0x47110d43175f7f2C2425E7d15792acC5817EB44f using the flipside_prod_db.ethereum.erc20_balances database and grouping the data by date. I presented the findings in the line chart: Value and Balance of GOHM in Bankless DEFI Innovation Index.
• Examine the average balance and average value of each token held by GMI by selecting the average balance daily and average value of tokens from the GMI contract: 0x47110d43175f7f2C2425E7d15792acC5817EB44f using the flipside_prod_db.ethereum.erc20_balances database and selecting symbol to get the average balance and average value of each token. I visualised these findings in the scatter chart: Value and Balance of Tokens In Bankless DeFi Innovation Index Today.
• Analyse the value of the GMI token and the balance of GOHM in the GMI contract by selecting the average balance daily of GOHM tokens from the GMI contract: 0x47110d43175f7f2C2425E7d15792acC5817EB44f using the flipside_prod_db.ethereum.erc20_balances database. Then selecting the average price daily from the flipside_prod_db.ethereum_core.fact_hourly_token_prices database and joining the data of average balance daily and average price daily. I presented the resulting data in the line chart: GOHM Balance and GMI token price.
Total Cryptocurrency Market Cap - Coinmarketcap
As the total marketcap has seen an overall decline since the index was created in January it isn't surprising that the underlying price of GMI token hasn't performed too well as, as explained by Investopedia a draw back of Index Funds is that you are ' completely vulnerable when the market drops'.
Bankless DEFI innovation index or GMI has been increasing it's holding of GOHM over time with an initial spike after launch. Both the increase in holdings and the value of it's holding at the time of writing being the second largest in the index out of 16 with both likely indicating the index's hopes for GOHM being a high potential asset. We can see that while the balance of GOHM has increased, the overall market has taken a dip since the launch of the token, with index tokens being more likely to follow market trends we can see how the index tokens price isn't performing well despite increasing it's holding of GOHM.