An index token is intended to track a specific index of cryptocurrencies or other assets. Index tokens work in the same way that indexes do in the traditional stock market. Index tokens are frequently used to track the market capitalization of several decentralized finance (DeFi) projects (such as Compound, Aave, Uniswap, and MakerDAO) or several Layer-1 smart contract blockchain platforms (such as Ethereum, Cardano, Avalanche, Polkadot, and Cosmos). A crypto-based synthetic index token can also be used to track stock indices such as the S and P 500 or the NASDAQ.
A Home for All Things DeFi