1. What is an index?
An index is a statistical measure of the changes in a portfolio of trackers (tokens) representing a portion of the overall market. A weighting methodology is usually used for calculating the index.
2. OK05 & OK06 indices
OKEx constructed OK05 & OK06 indices by tracking the most representable tokens in the current market with a capitalization-based weighting methodology. The OK05 index tracks BTC, ETH, LTC, BCH, and EOS. It serves as a benchmark of the whole digital asset market that allows investors to track and replicate easily. While the OKB index tracks the same 5 constituents plus OKB, it reflects the performance of the market on OKEx.
3. Weighting Methodology
There are a number of methodologies used by different indices, such as simple average, price-based weighting, equal-weighted, and capitalization-based weighting. Capitalization-based weighting can lower the risk of market manipulation, as the distribution of the tokens in high circulation is more scattered. Also, some indices include the maximum limit for single token's share in the index.
Both OK05 & OK06 indices adopt a capitalization-based weighting methodology with a minimum limit of 10% share of each constituent, to prevent one or two tokens from dominating the index.
For detailed constituent selection and calculation, please refer to: OK05 & OK06 Indices Construction Methodology.