> For the complete documentation index, see [llms.txt](https://sosovalue-1.gitbook.io/sosovalue-spotlight-indices-methodology/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://sosovalue-1.gitbook.io/sosovalue-spotlight-indices-methodology/readme.md). # SoSoValue Spotlight Indices Methodology ## 1. Introduction The SoSoValue Spotlight Indices are designed to measure the overall performance of crypto assets associated with specific market themes, ecosystems, technological directions, business models, market narratives, or other trending market topics. These indices serve as reference tools for market participants to observe the development trends, market performance, and relative changes of various thematic sectors. Different Spotlight Indices may adopt different constituent selection rules and maintenance methodologies based on the characteristics of their respective themes. ## 2. Index Name and Basic Information | Item | Description | | --------------------- | --------------------------------------------------------------------------------------------------------------------------------- | | Index Series | SoSoValue Spotlight Indices | | Underlying Assets | Crypto assets associated with specific market themes, ecosystems, technological directions, business models, or market narratives | | Base Index Value | 10 | | Pricing Currency | USD | | Eligible Universe | Crypto assets belonging to the corresponding Spotlight category and satisfying the index eligibility requirements | | Rebalancing Frequency | Monthly | ## 3. Periodic Rebalancing Rules ### 3.1 Eligible Universe The eligible universe of a Spotlight Index consists of crypto assets that belong to the corresponding Spotlight category and satisfy the SoSoValue index eligibility requirements. Spotlight is SoSoValue's thematic classification framework for identifying and categorizing crypto assets associated with specific market themes, ecosystems, technological directions, business models, and market narratives. SoSoValue may add, merge, revise, or discontinue Spotlight categories based on market developments. ### 3.2 Constituent Selection Methodology A Spotlight Index consists of a group of crypto assets sharing a common thematic relationship. Constituent selection is primarily based on thematic relevance while also considering market capitalization, liquidity, data quality, ecosystem significance, and market representativeness. Constituent maintenance follows the principles below: * Thematic relevance is the primary consideration. Evaluation may include factors such as a project's core functionality, protocol characteristics, product or service attributes, business model, technical architecture, actual token utility, revenue sources, ecosystem participation, market perception, and publicly disclosed project information. * Market data serves as the objective basis for evaluation. Candidate assets should have complete, reliable, and continuously available data, including price, circulating supply, market capitalization, trading volume, and exchange trading information. * Liquidity and market capitalization are important screening criteria. SoSoValue may use the 30-day average trading volume to evaluate liquidity and the 30-day average circulating market capitalization to evaluate market size. * Representative assets are selected for inclusion. Based on factors such as theme maturity, market representativeness, ecosystem influence, and other appropriate indicators, a certain number of representative assets may be selected for inclusion in the index. * Multiple classifications are permitted. A crypto asset may belong to multiple Spotlight categories simultaneously and may therefore qualify as a candidate or constituent asset for multiple Spotlight Indices. Unless otherwise specified by a particular Spotlight Index, the following assets are generally excluded from the eligible universe: * Stablecoins * Wrapped Tokens * Synthetic Assets * Derivative Tokens * Assets lacking reliable market data * Other assets that do not satisfy index eligibility requirements ### 3.3 Asset Eligibility Requirements A candidate asset must be traded on at least one qualified crypto asset exchange recognized by SoSoValue. Qualified exchanges may include: * Binance, Coinbase, OKX, Bybit, and Bitget * Other trading venues that satisfy SoSoValue's data and market quality standards A candidate asset must have at least one trading pair capable of providing reliable pricing data. Eligible quote assets include, but are not limited to: * USD, USDT, and USDC * Other fiat currencies or stablecoins approved by SoSoValue ### 3.4 Rebalancing Schedule | Index Type | Primary Selection Criteria | Rebalancing Frequency | | -------------------------- | ---------------------------------------------------------------------------------------------------------------------------------- | --------------------- | | Spotlight Thematic Indices | Thematic relevance, 30-day average circulating market capitalization, 30-day average trading volume, and market representativeness | Monthly | Unless otherwise specified by a particular Spotlight Index: * The fifth calendar day before the end of each month shall serve as the Adjustment Reference Date. * The first calendar day of the following month shall serve as the Adjustment Effective Date. The Adjustment Reference Date is used to determine the market data, classification information, and constituent eligibility applied during the rebalancing process. ### 3.5 Constituent Weighting Methodology Unless otherwise specified by a particular Spotlight Index, constituent weights are determined using a circulating market capitalization weighting methodology. | Weighting Method | Description | | ------------------------------------------- | ------------------------------------------------------------------------------------------------- | | Circulating Market Capitalization Weighting | Default weighting methodology based on each constituent asset's circulating market capitalization | Following each rebalance, all constituent weights are normalized so that the total weight equals 100%. ## 4. Index Calculation Methodology Let (P\_i) be the market price of the (i)-th cryptocurrency, (S\_i) be its circulating supply, and (N) be the total number of cryptocurrencies in the index. The market capitalization (M\_i) of the (i)-th cryptocurrency is calculated as: $$ M\_i = P\_i \times S\_i $$ Let (T) be the total market capitalization of the index, calculated as: $$ T = \sum\_{i=1}^{N} M\_i $$ The original weight (W'\_{i}) of the (i)-th cryptocurrency in the index is calculated as: $$ W'\_{i} = \frac{M\_i}{T} $$ Define the price change rate (R\_{i,t}) as: $$ R\_{i,t} = \frac{P\_{i,t}}{P\_{i,0}} $$ where (P\_{i,t}) is the price of constituent token (i) on day (t), and (P\_{i,0}) is the price of constituent token (i) at the base period. Calculate the overall index's weighted price change rate (R\_{\mathrm{weighted},t}) as: $$ R\_{\mathrm{weighted},t} \= \sum\_{i=1}^{N} \left(W\_{i,0} \times R\_{i,t}\right) $$ Here, (W\_{i,0}) is the weight of constituent token (i) at the base period. The index value on day (t) is calculated as: $$ I\_t = I\_0 \times R\_{\mathrm{weighted},t} $$ ## 5. Constituent Maintenance Rules SoSoValue will periodically review Spotlight Indices. Review items include: * Spotlight classifications * Constituent eligibility * Asset liquidity * Market capitalization * Weight calculations * Constituent additions and removals * Data quality and index representativeness ### 5.1 Constituent Additions and Removals An asset may be removed from the index under any of the following circumstances: * It no longer belongs to the relevant Spotlight category. * It no longer satisfies exchange, data support, or trading pair requirements. * It no longer meets liquidity requirements. * It no longer meets market capitalization requirements. * Required data is unavailable. * Significant trading restrictions arise. * Other circumstances affecting index representativeness. Eligible new assets may be added during scheduled rebalancing events. ### 5.2 Special Adjustments SoSoValue may implement special adjustments outside the regular rebalancing schedule, including but not limited to: * Token delistings * Prolonged trading suspensions or inactive trading * Project termination * Token migrations * Blockchain migrations * Token mergers or splits * Severe liquidity deterioration * Major security incidents * Regulatory restrictions * Other significant market events Where necessary, SoSoValue may take actions including: * Removing assets * Replacing assets * Suspending index calculation * Applying alternative pricing sources * Adjusting constituent weights * Implementing other necessary measures ## 6. Glossary | Term | Definition | | --------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | | Spotlight | SoSoValue's thematic classification framework for identifying and categorizing crypto assets associated with specific market themes, ecosystems, technological directions, business models, and market narratives. | | Constituent Asset | A crypto asset included in the index calculation. | | Candidate Asset | A crypto asset belonging to the relevant Spotlight category and satisfying index eligibility requirements, available for further selection. | | Rebalancing | The process of periodically adjusting constituent assets and their weights within an index. | | Adjustment Reference Date | The reference date used to determine the market data and classification information applied during index rebalancing. | | Adjustment Effective Date | The date on which new constituent assets and weights officially become effective. | | Circulating Market Capitalization | The product of a constituent asset's price and circulating supply. | --- # Agent Instructions This documentation is published with GitBook. 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