# Helix L1 Index (L1X)

**Overview**

The Helix "L1 Index" is a cryptocurrency index designed to provide investors with diversified exposure to the most promising L1 blockchain projects.

***

#### **Index Composition - Layer 1 Tokens**

* **Components**: 10 tokens, including Solana (SOL), BNB (BNB), Tron (TRX), Avalanche (AVAX), Sui (SUI), Toncoin (TON), Hyperliquid (HYPE), Injective (INJ), Sonic (S), and Sei (SEI).
* **Weighting Methodology**: Market capitalization-weighted.
* **Rebalancing Frequency**: Monthly.

#### **The Weights -**

| Solana (SOL)       | **0.25**      |
| ------------------ | ------------- |
| BNB (BNB)          | **0.25**      |
| Tron (TRX)         | **0.1267427** |
| Avalanche (AVAX)   | **0.1045627** |
| Sui (SUI)          | **0.0931559** |
| Toncoin (TON)      | **0.0868188** |
| Hyperliquid (HYPE) | **0.0506971** |
| Injective (INJ)    | **0.0139417** |
| Sonic (S)          | **0.0126**    |
| Sei (SEI)          | **0.0114068** |

***

#### **How the Index is Priced**

#### **1. Initial Calculation:**

* **Market Cap Calculation**: For each token, its market capitalization is calculated by multiplying the token's price by its circulating supply.
* **Initial Weights**: Each token’s weight is determined by dividing its market cap by the total token market cap.

#### **2. Price Calculation:**

* **Index Value**: The index is priced by aggregating the weighted prices of each component token.
* **Formula**: First we divide the market capitalization for each asset by the sum of the total market capitalization. This gives us the asset-specific weight for for the index. Then we normalize the weights, such that no single asset represents more than 25% of the index. Lastly, we add up the normalized market capitalizations and divide by 100,000,000 (10^8) to get an index price for the asset.

Here are the steps in formula form:

1. **Calculate the total market capitalization:**

$$
TMC= \sum\_{i=1}^{n} MC^{i}
$$

$$MC^{i}$$ *represents the element with index* $$i$$ *in the real valued vector* $$MC \in \R^{n}$$

2. **Calculate asset-specific weights:**

$$
w^{i} = \frac{MC^{i}}{TMC}
$$

where $$w^{i}$$ represents each element of the real valued vector $$w\_{crypto} \in \R^{n\times1}$$  $$w\_{equity} \in \R^{m \times 1}$$

3. **Calculate normalized market capitalizations:**

Based on the new $$nw$$ we calculate the total normalized market cap:

$$
nmc = MC\_{T} \ nw
$$

where

$$
nmc \in \R^{(n+m) \times 1}
$$

4. **Calculate the index price:**

The index price is now:

$$
S\_t^{index} = \frac{\sum\_{i=1}^{n+m} nmc}{\text{divisor}}
$$

where the numerator is a vector summation, and the $$\text{divisor} = 10^{8}$$.

***

#### **Index Operation and Investor Use**

#### **1. Index Usage:**

* **Benchmarking**: Investors can use the "L1 Index" as a benchmark to measure the performance of their portfolios.

#### **2. Risk Management:**

* **Cap on Dominance**: The representative caps prevent any single token from dominating the index, reducing concentration risk.
* **Diversification**: By including 10 tokens, the index mitigates the impact of poor performance in any one project.

#### **3. Performance Monitoring:**

* **Real-Time Tracking**: The index value is updated in real-time based on the latest prices of the component tokens.
* **Historical Data**: Historical index values are available to analyze trends and performance over time