5.4 Index General Methodology

1. Introduction

The SoSoValue Index methodology serves as a standardized framework for constructing and maintaining broad-based indices within the cryptocurrency market. This general rule set is designed to ensure that each index accurately reflects market dynamics, providing investors with a reliable benchmark for performance.

2. Index Construction

2.1 Asset Universe Eligibility

Eligibility for inclusion in the asset universe is determined by qualitative assessments detailed below.

• Exchange Requirement: Candidate tokens must be traded on any of the following qualified exchanges: Binance, OKEx, Coinbase, Bybit, or Bitget

• Data Support Requirement: Candidate tokens must be supported by data providers SoSoValue.

• Trading Pair Requirement: Candidate tokens must support trading with at least one of the following: USD, USDT or USDC.

• Compliance Requirement: Candidate tokens must comply with relevant laws and regulations, ensuring legality and regulatory adherence within the applicable legal framework.

• Exclusions: Candidate tokens must not include stablecoins or any tokens that serve as derivatives of other cryptocurrencies.

• Liquidity Requirements: For all tokens in the market that meet the above criteria, calculate the 30-day average daily trading volume and rank them in descending order, excluding the bottom 10%.

• Market Cap Requirements: Market capitalization (Market Cap) refers to the total value of a token’s circulating supply, calculated by multiplying the current price by the number of tokens in circulation. For all tokens in the market that meet the above criteria, calculate the 30-day average Market Cap and rank them in descending order, excluding the bottom 10%.

2.2 Sector Classification

For industry-focused index compilation, the SoSoValue sector classification system can be referenced to align with the following 12 sectors

Sector Name	Sector Definition	Sector Composition
Layer1	Refers to general-purpose public blockchain platform that does not depend on other blockchains and provides a wide range of application scenarios, not specifically limited to payment or currency functions.	PoS Public Chain Projects: Public Chain utilizing Proof of Stake mechanism PoW Public Chain Projects: Public Chain platforms utilizing Proof of Work mechanism
Layer2	Refers to protocols and solutions built on top of Layer1 blockchains, aimed at improving blockchain scalability and efficiency, or enhancing network functions and security.	Scalability Solutions Projects Modular Blockchains Projects
DeFi	Refers to financial infrastructures built on blockchain technology, mainly offering a variety of financial services through smart contracts and decentralized applications (DApps), including lending, trading, and yield farming, aiming to provide permissionless and decentralized financial services.	Decentralized Trading Platforms / Protocols Decentralized Options Derivatives Trading Platforms / Protocols Decentralized Derivatives Platforms / Protocols Decentralized Lending Platforms / Protocols Decentralized Yield Platforms / Aggregators Decentralized Staking Platforms / Protocols Decentralized Insurance Platforms / Protocols DeFi Infrastructure - Oracles DeFi Infrastructure - Cross-chain Bridges
RWA	Refers to the digitization of real-world assets (such as real estate, stocks, bonds, commodities, or asset portfolios) through blockchain technology to enable trading, management, and investment on blockchain.	Intangible RWA Products Tangible RWA Products
CeFi	Refers to the model within the cryptocurrency domain that provides financial services and products based on traditional financial institutions or centralized trading platforms, in contrast to Decentralized Finance (DeFi).	Centralized Exchanges Custodial Services Platforms Centralized Lending and Yield Financial Services Platforms）
Payment	Refers to solutions within the cryptocurrency domain that specifically involve cryptocurrency payments and transactions, including platforms focused on government and currency functions, cryptocurrency payment gateways, cryptocurrency payment processing service providers, etc.	Blockchain Projects Specific to Payment or Currency Functions Cryptocurrency Payment and Transaction Infrastructure
Meme	Refers to cryptocurrencies created based on internet memes or cultural phenomena, usually not based on specific technology or use cases, characterized mainly by community support and viral marketing.	Memes or Cultural Phenomena from Outside the Crypto Sphere Native Memes Culture or Social Experiments within the Crypto Sphere
DePIN	Refers to decentralized physical infrastructure networks managed and operated using blockchain technology, aiming to improve efficiency, transparency, and fairness of participation.	Physical Resource Networks (sensors, wireless, energy) Digital Resource Networks (computing, bandwidth, AI, storage) DePIN Modules & Infra
AI	Refers to projects or ecosystems that combine artificial intelligence technology with blockchain or cryptocurrency technology, aimed at enhancing automation, data processing efficiency, and intelligent decision-making capabilities.	AI Agent AI-driven protocol AI-related applications General AI Infrastructure / Platforms
GameFi	Refers to gaming projects and ecosystems that integrate blockchain technology, cryptocurrencies, and economic systems, aiming to enable players to earn real economic value through gaming, including Play to Earn (P2E) video games, blockchain platforms and ecosystems dedicated to gaming, gaming guilds, metaverse applications, etc.	Play-to-Earn video games within GameFi Metaverse Applications Public blockchain platforms specifically for GameFi ecosystems Guilds within gaming ecosystems
NFT	Refers to unique digital assets created using blockchain technology for standard-related projects and industries, including NFT underlying infrastructure, digital art collectibles, and industrialization projects of NFTs.	NFT Infrastructure: Trading / Lending Platforms NFT + Art Projects Related Tokens NFT Industrialization Projects: Entertainment / Music / Multimedia
SocialFi	Refers to platforms or projects that combine social networking features with decentralized finance (DeFi), aiming to create a transparent, decentralized social network and economic system through blockchain technology.	Social Platform Tokens Tokens with Social + Financial Incentives Social Networking Middleware Personal Tokens

2.3 Index Constituent Selection

Constituent token selection may adhere to the following guidelines.2.3.1 Listing Duration Requirement:Constituent tokens must be listed and actively traded on a qualified exchange for a specified minimum period.

2.3.2 Market Cap Requirement:

• Market Cap Ranking: Eligible tokens are ranked by 30-day average market capitalization (in USD), in descending order, with an option to limit the ranking range.

• Market Cap Test: The 30-day average is used, and if the average exceeds a specified threshold, the token is considered to have passed the Market Cap test.

2.3.3 FDV Requirement:

• FDV Ranking: Fully Diluted Valuation (FDV) represents the total value of a token’s maximum supply, calculated by multiplying the current price by the total number of tokens that could ever exist, including those not yet in circulation. Eligible tokens are ranked by 30-day average FDV (in USD), in descending order, with an option to limit the ranking range.

2.3.4 Liquidity Requirement:

• Trading Volume Ranking：Eligible tokens are ranked by 30-day average trading volume (in USD), in descending order, with an option to limit the ranking range.

• Circulation Test: The circulation ratio is calculated by dividing the token's freely circulating supply by its total supply, measured at 00:00 (UTC). The 30-day average is used, and if the average exceeds a specified threshold, the token is considered to have passed the circulation test.

• Turnover Rate Test: The daily turnover rate is calculated by dividing the 24-hour trading volume (from 00:00 to 24:00, UTC) by the freely circulating supply. The 30-day average is used, and if the average exceeds a specified threshold, the token is considered to have passed the turnover rate test.

2.3.5 Blacklist:

A defined set of blacklisted tokens may be designated, excluding them from eligibility for inclusion in the index.

2.3.6 Constituent Selection:

Eligible tokens will be ranked by their 30-day average circulating market value in descending order, with a specified number being selected. If two tokens have the same average circulating market value, the token with the higher 30-day average trading volume will be chosen.

2.4 Index Weighting & Calculations

Weighting

All constituent tokens are weighted according to their Market Cap

Calculation

Let $P_i$ be the market price of the $i^{th}$ token, $S_i$ be its circulating supply, and $N$ be the total number of tokens in the Index. Then, the Market Cap $M_i$ of the $i^{th}$ token is calculated as:

$M_i = P_i \times S_i$

Let $T$ be the total Market Cap, calculated as:

$T = \sum_{i}^n M_i$

Then, the original weight $W'_i$ of the $i^{th}$ token 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 $t$

$P_{i,0}$ is the price of constituent token $i$ at the base period

Calculate the overall Index's weighted price change rate $R_{weighted,t}$ as:

$R_{weighted,t} = \sum_{i}^n ( W_{i,0} \times R_{i,t})$

Here, $W_{i,0}$ is the weight of constituent token $i$ at the base period.

Calculate the value of day $t$ as:

$I_t = I_0 \times R_{weighted,t}$

2.5 Consituent Pricing

For the calculation of index weightings, the price of the constituent tokens at UTC 24:00 on the Adjustment Reference Date will be used.

2.6 Capped Market Cap Index Calculation

For the Capped Market Cap Index Calculation, the indices initiate allocation weight assignments based on the blended Market Cap of each respective token reflected on the rebalancing reference date. Subsequently, a weight control mechanism is introduced, which limits the allocation weight of the largest constituent to a predetermined percentage, which differs between indices. The excess weight is distributed proportionately among the remaining index constituents. During this distribution process, a rule is enforced to ensure that subsequent allocation weights do not surpass the size of prior allocation weights, with the weighting process occurring in descending order of market capitalization.

2.7 Minimum Weighting Allocation

For the Minimum Weighting Allocation methodology, each eligible constituent is first assigned a predetermined minimum allocation weight, which may vary depending on the index design. After assigning the minimum weights, the remaining weight (i.e., the residual portion of the index not already allocated) is distributed among all constituents in proportion to their Market Cap as observed on the rebalancing reference date. The final index weight for each token is the sum of its minimum weight and its proportionate share of the residual market-cap-based allocation.

3. Index Maintenance

3.1 Index Reconstitution & Rebalancing

The Synthetic Asset is designed to undergo regular rebalancing. Each rebalancing cycle may involve reviewing and updating the list of constituent tokens as well as recalculating their respective weights based on recent market data, such as circulating market capitalization.To facilitate the rebalancing process, key conceptual dates are defined:

• Rebalancing Frequency: The rebalancing frequency refers to how often the index composition and weightings are reviewed and potentially adjusted.

• Reference Date: A reference point near the end of each period (e.g., several calendar days before month-end) used to determine the eligible constituents and their indicative weights based on the latest available data.

• Implementation & Announcement Date: A date shortly after the start of the following period (e.g., around the first calendar day of the new month) when the updated composition and weightings are formally announced and take effect.

3.1.2 Additions and Deletions:

Re-ranking of the constituent tokens from each sector based on the latest Market Cap.

Existing constituent tokens ranked below the lower threshold will be removed from the index, while non-constituent tokens must rank reach or exceed the upper threshold to be included.

For indices with a fixed number of constituent tokens, if the number of tokens added exceeds the number removed, the lowest-ranked constituent token will be removed. Conversely, if the number of tokens removed exceeds the number added, the highest-ranked non-constituent token will be included.

3.2 Base Data and History Availability

• Base Date: The Base Date is the starting point of the index’s calculation, representing the date from which historical index values are computed. It serves as the anchor for time series analysis.

• Base Value: The Base Value is the initial numerical level assigned to the index on the Base Date. It is a notional figure (e.g., 10) chosen for ease of interpretation and scaling. All subsequent index values are expressed relative to this base level.

• Index Currency: USD

4. Methodology Review & Governance

4.1 Index Change Announcements

Index change announcements entail events that impact various aspects of index construction, administration, and maintenance. They will be updated monthly and published on the official website（https://ssi.sosovalue.com/) on Announcement Date.

4.2 Index Termination

Index termination requires an application, which must be reviewed and approved prior to termination.

4.3 Index Oversight Committee

The final determinations regarding modifications to index methodologies are exclusively made by SoSoValue through its internal Index Oversight Committee. Any modifications to the index methodologies, if implemented, are publicly announced well in advance to ensure equitable access to this information by all market participants.

Appendix 1: Document Revision History

Timing	Description
2024/12/24	Initial version. Members of the public are invited to review and provide their feedback on the document.
2025/9/15	The General Methodology has been revised to incorporate updated definitions for Rebalancing Frequency, Reference Date, Implementation & Announcement Date, Base Date, and Base Value, alongside the introduction of a Minimum Weighting Allocation framework to enhance index construction precision and constituent representation.

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This cryptocurrency index methodology document (hereinafter referred to as the "Document") and its contents are provided solely for reference purposes and do not constitute any investment advice, recommendation, or invitation. All data, analysis, and index compilation methods mentioned in the Document represent the views of the authors or compilers at the time of publication, and are based on information sources believed to be reliable. However, the authors or compilers do not guarantee the accuracy or completeness of such information and shall not be liable for any direct or indirect losses resulting from the use of the contents of this Document.

Investing in cryptocurrencies and cryptocurrency indices involves high risks, including but not limited to market volatility, price changes, technical vulnerabilities, and changes in laws and regulations. Investors should conduct their own risk assessment before making any investment decisions and, if necessary, consult independent financial and legal advisors.

The right to interpret and amend this disclaimer belongs to SoSoValue. Any modifications to this disclaimer will be updated on the SoSoValue platform and will take effect from the date of announcement.