Smart contracts must meet the following eligibility factors for our algorithms to include them in index consideration on any given day. As applicable, the measurement date is midnight UTC of the previous trading day.
Only smart contracts deployed on supported and mapped blockchain networks are eligible. A list of supported networks is outlined in Appendix A. We expect this list to grow over time. Each index is restricted to one or more mapped networks, which are outlined in Appendix B.
For EVM (Ethereum Virtual Machine) compatible networks, only smart contracts adhering to the ERC-721 or ERC-1155 standards are eligible. An exception is made for the original CryptoPunks smart contract on Ethereum (which does not adhere to either standard) due to its significance.
For all other networks, only contracts adhering to standards that are similar to ERC-721 or ERC-1155 are eligible.
For future index products, we anticipate making eligible certain smart contracts that adhere to the ERC-20 (or equivalent) standard, as appropriate.
For a given day, only smart contracts ranking in the top (contract quantity times two) in terms of market capitalization for the previous day are eligible. So for the Forkast 500 NFT index, smart contracts in the top (500 x 2 = 1,000) in terms of market capitalization for the previous day are eligible.
Market capitalization is measured in terms of US dollars for ranking purposes and is calculated by multiplying the “basis price” of a smart contract times its total token supply. The basis price is a function of our proprietary algorithm that uses eligible transactions from the on-chain ledgers to calculate the estimated market value of a random asset from each smart contract at any given point in time.
For clarity, the basis price will always be equal to (or more likely greater than) the “floor price” of a given smart contract, because it accounts for assets whose attributes and/or utility produce a market value that is greater than assets that trade at the floor price.
For a given day, only smart contracts ranking in the top (contract quantity times two) in terms of sales volume for the previous day are eligible. So for the Forkast 500 NFT index, smart contracts in the top (500 x 2 = 1,000) in terms of sales volume for the previous day are eligible.
Sales volume is measured in terms of US dollars for ranking purposes and is adjusted to exclude any sales that are determined to be “wash” transactions, or otherwise not arm's-length transactions, per our algorithms.
Any smart contract that appears on an index’s blacklist is ineligible for consideration in the index during the blacklisted time period. This time period can be fixed or indefinite, and smart contracts can be added to a blacklist at the discretion of Forkast Labs. Blacklists will only be used in the case of potential irregular activity on a smart contract that requires further investigation.