ALX10 Index Methodology

1. Introduction and Index Objective

The Allisora Top 10 Crypto Index ("ALX10" or the "Index") is a rules-based benchmark designed to measure the performance of the largest cryptoassets by free-float market capitalization. The Index seeks to represent the core segment of the global cryptoasset market by capturing assets that exhibit significant market capitalization, liquidity, and price discovery.

The ALX10 is intended for use as a benchmark for performance measurement, index-linked financial products, research, and market analysis. The Index is designed to be transparent, systematic, and reproducible, with all constituent selection and weighting decisions governed by objective rules.

The Index does not aim to predict performance or provide investment recommendations. Its sole objective is to measure market performance as defined by this methodology.

2. Index Universe Definition

2.1 General Eligibility

The eligible universe consists of cryptoassets that satisfy all of the following conditions:

• The asset must be publicly traded with observable market prices.
• The asset must have a defined and verifiable circulating supply.
• The asset must be actively traded on multiple major centralized cryptocurrency exchanges.
• The asset must have sufficient historical price and market capitalization data available for calculation and review.
• The asset must exhibit ongoing price discovery through open market transactions.

Eligibility is assessed at each rebalancing date and may also be reviewed on an ongoing basis for extraordinary events.

2.2 Free-Float Market Capitalization

Free-float market capitalization is defined as:

Only circulating supply that is reasonably available for trading is considered. Locked, escrowed, or permanently restricted supply may be excluded where reliable information is available.

3. Excluded Asset Categories

The following categories of cryptoassets are excluded from the eligible universe:

These exclusions ensure that the Index reflects assets with independent price formation and broad market participation.

4. Constituent Selection Process

4.1 Ranking Procedure

At each scheduled rebalancing date:

1. All eligible cryptoassets are ranked in descending order by free-float market capitalization.
2. Market capitalization data is sourced according to the price and supply methodology defined in Section 7.
3. Only assets meeting eligibility and exclusion criteria at the time of review are considered.

4.2 Constituent Count

• The Index includes the top ten (10) ranked eligible cryptoassets.
• If fewer than ten assets meet eligibility criteria, the Index may temporarily include fewer constituents.
• No discretionary additions are made outside the rules defined herein.

5. Weighting Methodology

5.1 Market Capitalization Weighting

Each constituent is initially weighted according to its proportion of the total free-float market capitalization of all Index constituents.

5.2 Weight Cap

To mitigate excessive concentration risk:

• A maximum weight cap of 20% is applied to each constituent at rebalancing.
• If any constituent exceeds the cap, the excess weight is redistributed proportionally among the remaining constituents.
• The redistribution process may be repeated iteratively until all constituents comply with the cap.

5.3 Weight Stability

Constituent weights remain fixed between scheduled rebalancing dates, except in cases of extraordinary events such as delistings or material eligibility changes.

6. Rebalancing and Reconstitution

6.1 Rebalancing Frequency

The ALX10 is rebalanced on a quarterly basis.

• Rebalancing occurs after the close of trading on the final calendar day of each quarter.
• New constituents and weights become effective on the next index calculation day.

6.2 Reconstitution Rules

At each rebalancing:

• Constituent membership is reviewed.
• Weights are recalculated according to the weighting methodology.
• Changes are implemented simultaneously to minimize turnover distortion.

Unscheduled reconstitutions are avoided except when necessary to preserve index integrity.

7. Price Sources and Index Calculation

7.1 Price Determination

Prices are sourced from a selection of major centralized cryptocurrency exchanges that meet minimum standards for liquidity, transparency, and reliability.

When multiple sources are used:

• Prices may be aggregated using a simple average or volume-weighted average methodology.
• Outlier prices may be excluded if deemed erroneous or non-representative.

7.2 Calculation Timing

• The Index is calculated once per day.
• End-of-day prices are observed using Coordinated Universal Time (UTC).
• The Index base value is set to 100.00 on the base date.

7.3 Index Formula

The Index is calculated using a standard market-value-weighted index formula, maintaining continuity across rebalancing events.

8. Treatment of Extraordinary Events

8.1 Forks and Network Events

• Forked assets are evaluated independently.
• Inclusion of forked assets is subject to eligibility and exclusion criteria.
• No automatic inclusion is guaranteed.

8.2 Delistings and Ineligibility

• Assets that are delisted from major exchanges or no longer meet eligibility criteria may be removed.
• Removal may occur at the next scheduled rebalancing or earlier if continued inclusion would materially distort the Index.

8.3 Data Disruptions

• If a price source becomes unavailable, alternative approved sources may be used.
• If no reliable price is available, the most recent valid price may be carried forward temporarily.
• Persistent data issues may trigger constituent review.

9. Index Governance and Methodology Changes

Allisora maintains responsibility for the governance of the ALX10.

• The methodology is reviewed periodically to ensure continued relevance.
• Changes are made only when necessary to preserve accuracy, representativeness, or operational feasibility.
• All changes are documented, versioned, and publicly disclosed.

Material changes are communicated in advance where reasonably possible.

For detailed governance information, see our Disclaimers & Governance page.

10. Transparency and Publication

Allisora publishes:

• Daily index values
• Constituent lists and weights
• Methodology documentation
• Rebalance announcements and methodology updates

Historical data is maintained to ensure auditability and reproducibility.