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# AMKT Benchmark Methodology

Market Representation
The methodology will reference the digital assets recognized in . Using this pool of digital assets, the benchmark implementation aims to analyze and select the largest digital assets based on their free-float market capitalization size.
Free-Float Market Capitalization
Free-float market capitalization is a metric used to determine the largest digital assets from our asset universe. To calculate free-float market capitalization, one must multiply the circulating asset supply by its current price.
Asset Supply
The DAO’s methodology will utilize the circulating supply of a digital asset to calculate free-float market capitalization to determine inclusion and relative weighting. Circulating supply is defined as the supply of available units of a digital asset available to be moved from one deposit to another or available for trading.
Circulating supply will be calculated on the day immediately preceding the relevant rebalance and reconstitution day. This calculation will use the 5-day exponential moving average of the digital asset’s circulating supply. Circulating supply of digital asset remains fixed until the next reconstitution and rebalancing.
Exponential moving average is used to avoid price, supply, and market capitalization manipulation during rebalances and reconstitutions, as well as asset inclusion calculations.
Weighting
The selected constituents will be weighted according to their relative free-float market capitalizations. These weights are calculated by dividing the free-float market capitalization of a digital asset by the total free-float market capitalization of all the digital assets at the time of rebalancing and reconstitution.
Selection of Constituents
The asset list is limited to assets whose relative weighting (calculated using their free-float market capitalization) contributes more than .03% to the index. The process for selecting these digital assets is as follows:
Free-float market capitalization will be calculated by using the 5-day exponential moving average circulating supply of a digital asset multiplied by its 5-day exponential moving average price.
The following process will be used to determine the total amount of assets to include:
1. Each asset's relative weighting from the selection pool will be calculated into the index.
2. An asset’s relative weighting is determined beginning from the largest asset and descending in the sequence of free-float market capitalization.
3. Relative weighting is determined during this process using the previously included assets as part of the calculation.
4. Assets must have a relative weighting greater than .03%.
5. Once assets no longer contribute more than .03% weight to the index, the asset list of n is determined.
The index selects the top digital assets by free-float market capitalization to reflect the broader digital asset market based on relative dominance.
1. The top n assets by free-float market capitalization are chosen from the selection pool.
2. Weighting is determined using the relative free-float market capitalization.

#### Weighting Math and Calculations

$\begin{gather*}{\displaystyle \ \ \ \ \ \ \ MV_{t} =\sum\limits _{i=CS_{t}} CN_{i,t} \ *\ P_{i,t}}\\\\{\displaystyle w_{i,t} \ =}\frac{{\displaystyle CN_{i,t} \ *\ P_{i,t}}}{{\displaystyle \ MV_{t}}}\\\\{\displaystyle \ \ \ \ \ \ \ \ w_{i,t} \ =}\frac{{\displaystyle CC_{i,t} \ *\ P_{i,t}}}{{\displaystyle \sum\limits _{i=CS_{t}} CC_{i,t} \ *\ P_{i,t} \ }}\\\\\\MV_{t} \ =\ Market\ Value\ at\ t\\CS_{t} \ =\ Constituent\ Set\ at\ t\\\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ CN_{i,t} \ =\ Constituent's\ nominal\ units\ at\ t\\\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ CC_{i,t} \ =\ Constituent's\ circulating\ supply\\\ \ \ \ \ \ P_{i,t} \ =\ \ Consitituent's\ price\ at\ t\\{\displaystyle \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ w_{i,t} \ =\ Constituent's\ index\ weighting/dominance}\end{gather*}$

### Index Calendar

#### Reconstitution

Reconstitutions will occur on a quarterly schedule, effective on the first day of September, December, March, and June.
Reconstitution frequency is quarterly due to digital asset dominance fluctuating greatly quarter-to-quarter. Less frequent reconstitutions can result in overweighting in digital assets not properly reflecting the ecosystem. More frequent reconstitutions can result in higher fees resulting in tracking inefficiencies.

#### Rebalancing

Rebalances occur on a monthly basis, effective the first day of every month.