Liquid Index Series January 2019 Quarterly Review
BNC Index Governance Committee announces the following items and changes discussed during the BNC Quarterly Index Review. These changes will affect the Bitcoin Liquid Index (BLX) and Ethereum Liquid Index (ELX).
Constituents
The Index Committee has decided to keep the same constituents this quarter.
Trust factors
Considering the smooth migration of Bitfinex’s infrastructure to its own bare-metal servers, the Index Committee has removed the previously attributed demerits points. Coinbase, itBit and Gemini also increased their trust factors based on their order book depth and average trades. Bitstamp is the only one decreasing its trust factor based on a deterioration in frequency of trades.
Investigation of implementing a price divergence factor:
To reduce the impact of any diverging constituent in the LX calculation the Index Committee decided during the review, to implement a fourth weighting factor in the calculation methodology (on top of Volume, Liquidity and Trust factors). This factor will evaluate the price deviation between a specific constituent and the median of the constituents, and reduce the contribution of constituents that are above a threshold.
Please see the below public release for full details on this announcement.
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