Introduction to Andre Cronje Index ($ACX)
The Andre Cronje Index (ACX) is a synthetic crypto asset that derives its price from the total market cap of all Andre Cronje Projects at a ratio of 1: 5 billion. ACX exists to maintain a market rate that is stably pegged to its underlying asset. ACX’s peg to all market cap of the Andre Cronje projects is held stable through an elastic supply protocol. This protocol utilizes rebasing, a process which expands or contracts token supply to correct price. [ACX] allows traders to speculate on the best of DEFI community projects with one token.
2. The Best of the DEFI Community Projects
Creator of Yearn.Finance, Andre Cronje, the DEFI Architect merged & acquired several other DEFI community projects, enriching the Yearn community to a conglomerate that covers yield farming, exchange, lending, insurance, ETF, it represents the best of the DEFI community projects and have a symbolic meaning for the DEFI development on Ethereum.
Current 8 Andre Cronje Projects:
3. Elastic, Adaptive Money
The ACX is elastic, adaptive digital currency that adjusts supply daily based on market conditions.
The number of ACX you own can change each day, ACX automatically adjust supply in response to market conditions, when market condition worsens (the market cap drops), the target price drops, wallet balances increases, vice versa.
But you can never be diluted by supply inflation. ACX is non-dilutive. Supply adjustments are applied universally and proportionally across every wallet’s balance. This means your percent ownership of the network remains fixed.
ACX solves the inelasticity problem. Like precious metals, today’s fixed supply cryptocurrencies are vulnerable to sudden shocks in demand and cannot be used to denominate complex contracts. As a result, sophisticated economies cannot be built upon them.
Rebasing aims to peg the synthetic asset’s price perfectly with the price of its underlying asset. This is achieved by adjusting the synthetic asset’s supply until its market price reaches its target price.
ACX is non-dilutive, during rebase, the wallet balance and percent ownership of total supply remains constant.
4.1 Rebasing Lag and Potential Arbitrage Opportunity
For decentralized Exchanges such as Uniswap and SushiSwap, there won’t be any lag between the rebase time and the actual price correction time because the wallet balance will adjust at the rebase time as well.
For centralized exchanges, there will be arbitrage opportunities, because when the rebase happens, the limit orders in those centralized exchanges may not act instantly.
4.2 Rebase Frequency and Execution
The ACX rebasing starts with an instantaneous rebase period, where 100% of rebases occur at once. The default rebase frequency is 24 hours. That is subject to change according to community.
5. Data Source Stability and Adjust of the Index Components
We are using several data sources to ensure the stability of the data sources.
If one of the data sources differs from the median constituent for that index by 5% or more, it is excluded from the index calculation. We may add more data sources later on.
The index components (the projects covered) will be changed according to official Andre Cronje twitter announcements, the add/removal of a project will be announced within 48 hours of official Andre Cronje twitter announcements and the actual index adjustment will happen within another 48 hours.
The ACX staking program rewards ACX holders for providing liquidity to the Uniswap liquidity pool. A user needs to provide liquidity for ACX/ETH pair on uniswap and get the corresponding LP tokens. He/ She can thus visit the ACX staking dashboard and stake the LP tokens to earn staking rewards.
- A user can earn ACX for staking the ACX/ETH LP tokens.
- Actual APY = APY * Reward Multiplier
- Reward Multiplier = Min (3, 1 + no. of staking days/30), the longer a user deposited his/ her LP token, the bigger the rewards multiplier is. The maximum reward multiplier is 3x. By default, it’s 1x. The user can withdraw his LP token and get back his ACX and ETH from Uniswap anytime, but he loses his reward multiplier and his reward multiplier will be reset to 1. If the user make any changes (deposit more/ withdrawal) to the staking rewards, the reward multiplier will be reset to 1.
6.1 Refill the Staking Pool
The ACX staking pool will be initially funded by 13% of total supply and later be refunded via rebase.
When there is a supply expansion, an extra 10% of that expansion is minted — these tokens are deposited into the staking rewards pool. For example, if there is a 10% expansion, 1% extra is minted and goes to the staking pool.
When there is a supply contraction, 10% of the contraction doesn’t get destroyed — these tokens are deposited into the staking rewards pool. For example, if there is a 10% contraction, 1% is exempted and goes to the staking pool.
7. Community Governance Token
ACX also serves as the community governance token, the rebase frequency, index components adjustment rules, the ACX listing exchange, etc. are all subject to community governance.
8. Difference between YETI and ACX
ACX is a capitalization-weighted index. Most stock market indexes are cap-weighted indexes, including the Standard and Poor’s (S&P) 500 Index, the Wilshire 5000 Total Market Index (TMWX) and the Nasdaq Composite Index (IXIC). ACX has a target price each day and aims to peg the $ACX token price to market price via rebase. Market-cap indexes provide investors with access to a wide a variety of companies both large and small and automatically assign bigger weights to well-established companies (projects) because they tend to have bigger market caps.
YETI is more like an ETF fund with specific weights of each of the constituents. YETI has underlying assets in the balancer pool. It’s essentially the Balancer Liquidity Pool (BLP) Token of the 8-asset pool. YETI can be used to redeem to the 8 underlying assets. If you buy YETI, you are actually buying the BLP token, aka, you are buying 8 tokens with the preset weights.
Scalability wise, $ACX can adjust its constituents fast. But as YETI is built upon Balancer, so far balancer pool can hold up to 8 tokens so no more constituents can be added. Even when Balancer can support more assets in a single pool, as the pool weights are set, it’s impossible to modify the pool portfolio specification unless a new pool is created.
Robustness and flexibility wise, if one of the projects covered by $ACX fails, its market value will shrink sharply, its weight of the $ACX index will drop accordingly, minimize risk for future $ACX investors. While for YETI, as the weights are preset, investors actually hold the underlying assets, if one of the 8 projects fails, investor loses that portion of the investment, and future investor still have to pay for that failed project for preset portion of investment.
There are pros and cons between YETI and ACX, just like there are people who prefer to trade index and people who prefer to hold ETFs.
To know more about ACX: