Compass Financial Technologies: A Snapshot

Founded in 2017, Switzerland-based Compass Financial Technologies has quickly carved a niche for itself in the realm of financial indices. With a robust management of around $5 billion in investment products spanning crypto, commodities, multi-assets, and real estate, they are well-versed in discerning the ebb and flow of market demands.

Introducing the CCBFDEFI Index

On February 22, 2022, Compass Financial launched the Compass Crypto Basket Fundamental DeFi Index (CCBFDEFI). This exciting new venture caters to the growing institutional interest in decentralized finance (DeFi). By focusing on a selection of ten paramount DeFi tokens, the index provides a structured yet flexible approach to investing in this fast-evolving space.

Fundamental Metrics at Play

Gone are the days of merely following trends; the CCBFDEFI employs a methodical approach to token selection. Each token’s weighting is determined by a myriad of factors, including liquidity, market capitalization, and protocol revenue metrics. Notably, the maximum weighting allowed for a single token is capped at 35%, ensuring diversified exposure among the chosen assets.

A Monthly Refresh: Token Selection Process

The assets comprising the CCBFDEFI aren’t set in stone. This index is dynamic, with the selection of tokens refreshed monthly. Investors can expect big names to feature prominently—expect to see tokens like UniSwap (UNI), Compound (COMP), Aave (AAVE), and SushiSwap (SUSHI) making the cut as part of a wider roster of over 20 approved tokens.

Meeting Institutional Demand

As the appetite for crypto investments surges within institutional circles, Compass Financial’s CEO, Guillaume Le Fur, emphasizes their commitment to aligning indices with fundamental economic principles. He stated, “Incorporating fundamental metrics in index creation offers investors the possibility to allocate in the most efficient DeFi tokens based on rational economic indicators.” Sounds fancy, right? It’s superbly logical, and it’s also what institutions are banking on.

Compliance and Collaboration

Fostering trust and transparency, the CCBFDEFI is compliant with the EU Benchmark Regulations (EU BMR). It’s accessible on Compass’s website, Bloomberg, and Refinitiv, making it more prominent in institutional circles. Additionally, recent partnerships, such as with the esteemed CoinShares, signify a progressive roadmap, wherein Compass indices will guide pricing for CoinShares’ physical exchange-traded products (ETPs). Imagine having zero management fees and enjoying staking rewards, all while riding the DeFi wave—talk about a win-win!

A Year of Expansion

This strategic launch is merely the tip of the iceberg. In 2021, Compass Financial also built a suite of EU BMR-compliant crypto indices, covering various market segments from reference prices to smart-risk control. They’re on a roll, and it seems like DeFi investors better buckle up for a thrilling ride!