Venture capital firm a16z launches a crypto index combining 14 indicators to quickly assess industry vitality.

The cryptocurrency venture capital firm a16z recently not only released its annual report but also established an interactive crypto index. The purpose of creating this index is to avoid focusing solely on short-term market trends, neglecting the attention to potential technological trends, and thus misjudging the overall development of the cryptocurrency industry. By tracking the fluctuations of this index, a16z aims to provide cryptocurrency users with a more comprehensive overview of the market development at a glance.

Introduction to a16z Crypto Index

The a16z Crypto Index launched by a16z combines 14 different parameters for weighted calculation, divided into two categories: Innovation Indicators (supply-side) and Adoption Indicators (demand-side).

Composition of Innovation Indicators:

1. Active developers
2. Developers interested in the industry participating in open-source code related to the crypto field
3. Smart contract deployers
4. Verified smart contract count
5. Downloads of development tools in the crypto field
6. Number of academic research publications
7. Job search volume in the crypto field

Composition of Adoption Indicators:

1. Number of active user addresses
2. Number of blockchain transactions
3. Total transaction fees paid
4. Number of mobile wallet users
5. Trading volume on decentralized exchanges
6. Number of NFT buyers
7. Total stablecoin transfers on the blockchain

By weighting the average monthly growth of all the above indices, the crypto index can be calculated. The current a16z Crypto Index is 1615, slightly down by 5.86% compared to a year ago, but up by 11.54% from last month. By observing the trend changes in the index, one can gain a basic understanding of the current industry development and market activity.

In addition to viewing the overall index, the page also breaks down the index according to supply and demand indicators, allowing users to understand whether the current index mainly comes from the stronger supply side or demand side.

Furthermore, the a16z Crypto Index is interactive, allowing users to adjust the weights of each index on the right side of the page, which will update in real-time. Users can also set threshold values for each indicator, where weighted calculations will only occur when the value of the indicator exceeds the threshold.