Upbit Data Lab Launches Two On-Chain Strategy Indexes

Dunamu said on May 7 that it launched two digital-asset strategy indexes based on on-chain data.

The new benchmarks, called Ethereum Small-Cap Undervalued and Ethereum Small-Cap Overvalued, are the first digital-asset indexes in South Korea to use on-chain data in asset selection. On-chain data can be used to track asset flows through blockchain transaction records, but its complexity has limited access for retail investors.

The indexes are built on the MVRV, or Market Value to Realized Value, metric, which compares an asset’s market capitalization with its average on-chain purchase price. That is intended to help investors judge more intuitively whether an asset is undervalued or overheated.

The Ethereum Small-Cap Undervalued Index is made up of five small- and mid-cap Ethereum ERC-20 assets traded on Upbit’s Korean won market whose current prices are below their average on-chain purchase prices. The Ethereum Small-Cap Overvalued Index, by contrast, includes five assets whose current prices are above their average purchase prices, with all constituents equally weighted to reflect short-term overheating.

Both indexes are rebalanced regularly on the second day of each month. Stablecoins, meme coins and assets with investor-protection concerns are excluded.

Dunamu said the indexes are expected to help retail investors build investment strategies using on-chain data. Internal simulations showed that a portfolio based on the undervalued index posted relatively steadier long-term performance than one based on the overvalued index.

"Blockchain on-chain data is open to everyone, but it has been difficult to use, creating a large information asymmetry," Kim Dae-hyun, Dunamu’s chief data officer, said. "Starting with these two on-chain strategy indexes, we plan to actively develop related indexes so retail investors can also make use of on-chain data."