CoinDesk Indices, the leading provider of digital asset indices by AUM since 2014, in partnership with CoinFund, a leading Web3 and crypto-focused investment firm and registered investment adviser, today announced CESR, the composite ether staking rate.
CESR is a global floating rate benchmark derived from the daily transaction fees and staking rewards emitted from the Ethereum Proof of Stake (PoS) blockchain. As a global and unbiased benchmark, CESR can serve as a fundamental building block of the Web3 economy by enabling the proliferation of loans, bonds, futures, swaps, other derivative products and financial instruments that reference the index.
“We are excited to launch what we see as a defining institutional reference rate for the crypto asset class,” said Chris Perkins, President of CoinFund. “This benchmark is poised to precipitate the expansion of investment products across global finance to enhance stability and risk management capabilities for investors ultimately.”
This benchmark serves as an essential first step in the creation of a forward rate curve, serves as a new discount rate, and allows assets across the digital domain to be priced as a relative investment to CESR, as retail and institutional market participants are granted new opportunities to gain exposure and hedge risk. This development follows Ethereum’s transition from Proof-of-Work to Proof-of-Stake (‘The Merge’).
CESR captures all relevant block rewards paid to network validators, comprising new emissions issued by the Ethereum PoS blockchain and transaction fees awarded from existing circulation, including maximal extractable value (MEV). The methodology accounts for protocol “slashing” and protocol withdrawals. CESR will be calculated and published by CoinDesk Indices daily, seven days per week.
“Our partnership with CoinFund creates such a foundational piece of infrastructure to crypto-asset markets,” said Alan Campbell, President of CoinDesk Indices. “Drawing on our experience managing the longest-running and largest benchmarked crypto indices globally, we’re excited to launch CESR, a building block for crypto-based finance.”
Roger Bayston, EVP and Head of Digital Assets at Franklin Templeton expressed support for CESR “As a firm committed to innovation across digital assets and the Web3 ecosystem, Franklin Templeton is very excited about the launch of CESR, backed by CoinFund and CoinDesk Indices, and the pathways it may open for the industry to use this innovative new index.”
CESR will be released to the public in the coming weeks. To learn more, check here.
About CoinFund and CoinDesk Indices
CoinDesk Indices (CDI) has been the leading provider of digital asset indices by AUM since 2014 and is driven by research, rigour, and a desire to educate the marketplace and empower investors. CoinFund is a Web3 and crypto-focused investment firm and registered investment adviser that invests in seed, venture, and liquid opportunities within the blockchain sector, focusing on digital assets, decentralization technologies, and key enabling infrastructure.