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TokenMetrics TM100 Index: Technical Overview and Launch Details
Introduction
We're approaching the launch of the TokenMetrics 100 (TM100) index, a fully on-chain, non-custodial crypto index product we've been developing over the past several years. This newsletter provides technical details on the infrastructure, methodology, and key features.
Core Architecture
The TM100 is designed as a cross-chain and non-custodial index supporting seven blockchains: Ethereum, Base, Binance Smart Chain, Polygon, Avalanche, Arbitrum, and Solana. The index tracks the top 100 cryptocurrency tokens by market capitalization, filtered through specific liquidity and supply criteria.
Filtering Criteria:
Minimum 300k TVL or liquidity in AMM pools
Minimum 25% circulating supply (filters out low-float VC projects)
Market cap weighted allocation
Weekly rebalancing schedule
Market Indicator Integration
The key technical innovation is integration of our market indicator for risk management. Rather than maintaining positions during bearish conditions, the index algorithmically shifts to yield-bearing assets including:
Sky stablecoin (sUSDs) offering approximately 4% yield
PAX Gold (tokenized gold)
This risk-off/risk-on mechanism aims to reduce maximum drawdown periods during market corrections.
Infrastructure and Security
We've implemented multiple infrastructure layers:
Wallet Management: Privy handles wallet infrastructure, supporting social logins and traditional wallet connections.
Key Management: Turnkey provides secure private key management on the backend.
Smart Contract Security:
ERC-4626 tokenized vault standard
Audit via Cantina and Spiritbit
Real-time monitoring through Hypernative's smart contract firewall
Order Execution: LI.FI integration for smart order routing,
Backtesting Results
Historical simulations from 2017-present show:
Annualized return: 104% (without fees), 85% (with fees)
Volatility: 45%
Sharpe ratio: 1.58
Sortino ratio: 2.0
Maximum drawdown: 41%
For comparison, Bitcoin's maximum drawdown historically decreases by approximately 10% per cycle (from ~95% two cycles ago to ~75% last cycle to projected ~65% this cycle).
Fee Structure
Management Fee: 1% annually, accruing on-chain Performance Fee: 15% quarterly with high watermark
Fees can be reduced through TMAI staking:
Staking score of 10: reduces performance fee to 5%
Management fee reducible to 0.5%
Composability Features
The index token (representing ownership shares) is designed with DeFi composability:
Tradability: Index tokens can be traded on DEXs (Aerodrome, Uniswap) and potentially centralized exchanges
Yield Separation: Integration planned with Pendle protocol to separate principal and yield
Collateralization: Potential listing on money markets (Morpho, Euler) for borrowing against index holdings
API Access: Direct integration available for developers, AI agents, and treasury management systems
Technical Implementation Details
Delegated Actions: Uses ERC-7682 standard allowing automated rebalancing while maintaining non-custodial status
Purchase Mechanism: 24-hour pooling window for capital efficiency, with plans for more granular execution windows
Base Layer: Primary operations on Base blockchain due to lower transaction fees
Cross-Chain Execution: Sub-vaults across different chains holding underlying assets
Token Economics
10% of platform fees allocated to:
TMAI buyback and burn (50%)
Revenue share to TMAI stakers (50%)
Staking rewards distributed to veTM holders (locked TMAI) proportional to ownership percentage.
Early Access Program
We're conducting phased onboarding with reduced fees for early participants:
Management fee: as low as 0.5%
Performance fee: as low as 5%
No TMAI requirement (though holders receive additional benefits)
Market Outlook
Our analysis suggests:
Bitcoin peak projection: $140-145k
Total crypto market cap potential: $8-14 trillion (currently ~$4 trillion)
Projected cycle peak: Spring-Fall 2026
Maximum drawdown projection: ~65% (based on historical 10% reduction per cycle)
Additional Notes
Narrative Rotation: Current market shows strength in stablecoins, real-world assets, and perpetual protocols. The trading-focused nature of this cycle supports the case for automated, rules-based portfolio management.
Venture vs. Trading: We've strategically shifted from venture investments to liquid token strategies for the remainder of this cycle, with the index representing our primary market participation vehicle.
Technical Documentation
Full methodology documentation, smart contract addresses, and audit reports will be published prior to public launch. The early access staging environment is currently operational for testing.
This information is for educational purposes. All backtesting results are simulated and not indicative of future performance. Cryptocurrency investments carry significant risk.
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