The Philosophy Behind Fumbi Index Portfolio Selection

At Fumbi, we believe in the transformational power and high growth potential of cryptocurrencies. Since cryptocurrencies are still in the early stages of development, investing in them can be difficult for most people. That’s why, through the design of the Fumbi Index Portfolio, we have created the easiest way for anyone to invest in the cryptocurrency market.

The Fumbi Index Portfolio tracks the market capitalization of cryptocurrencies and is rebalanced daily by our algorithm. The portfolio consists of carefully selected cryptocurrencies and reflects our investment philosophy, which focuses on several key value factors and use cases in the crypto world.

Payments

For a long time, the internet lacked native protocols for transferring payments that would facilitate the exchange of value globally. Cryptocurrencies emerged as a response to this specific problem. While Bitcoin remains by far the most significant player in this field, several alternative cryptocurrencies have appeared in recent years, aiming to compete for market share in the payment sector.

Cryptocurrencies offer several advantages over traditional payment methods. They are faster, cheaper, more transparent, and eliminate intermediaries. Practically anyone from anywhere can send a payment without any restrictions. Additionally, cryptocurrencies offer censorship-resistant payments, something unheard of in traditional payment systems. Therefore, we believe payments are one of the most user-attractive domains and major value drivers in the cryptocurrency market.

Examples of assets: Bitcoin, Litecoin, Ripple, Stellar

With the Fumbi Index Portfolio, you invest in a selection of cryptocurrencies that are competing in the payment sector.

Web 3.0

Blockchain and distributed ledger technology (DLT) enable far more than just payments. Smart contract platforms like Ethereum have laid the foundation for the creation of decentralized applications that can be implemented across a wide range of industries – from finance and insurance to gaming, logistics, and more.

Smart contracts automate processes, increase efficiency, reduce costs, lower risks, and are inherently enforceable. These advantages are key reasons why we believe smart contracts will see increasing adoption in the future.

While Ethereum remains the most popular platform for smart contracts, it faces strong competition from several new projects that have emerged in recent years. These platforms, along with their applications, not only represent a new class of assets but also mark an evolutionary step in the development of the internet known as Web 3.0.

With the Fumbi Index Portfolio, you invest in various smart contract platforms and bet on the growth of the Web 3 ecosystem.

Examples of assets: Ethereum, Solana, Cardano, Cosmos

Decentralized finance (DeFi)

Decentralized or open finance is the fastest-growing segment in the cryptocurrency space. DeFi creates a universe of smart contracts that mimic traditional financial institutions’ functions and bring them onto the blockchain as open-source decentralized applications. The result is an open parallel financial system that is completely transparent and permissionless.

Unlike the traditional financial system, DeFi applications are governed by mathematics, ensuring equal access regardless of race, status, or geographic location. Thanks to these features, cryptocurrencies and DeFi applications provide a gateway to global financial markets for 2 billion unbanked people. Over the past two years, the DeFi ecosystem – comprising decentralized exchanges, lending protocols, and derivatives – has grown by hundreds of percent, not only in the number of applications and users but also in market capitalization.

Examples of assets: Maker, Aave, Uniswap, Pancakeswap, Curve

With the Fumbi Index Portfolio, you can invest in a variety of DeFi applications that are critical to building the new financial system.

Artificial intelligence (AI / DeFAI)

With the growing integration of artificial intelligence and blockchain technologies, new opportunities are emerging for decentralized systems that combine the power of data analysis and automation with the security and transparency of blockchain. In the field of DeFAI (decentralized artificial intelligence), smart contracts are used to process and analyze data, enabling the development of applications capable of adaptive real-time decision-making. A significant innovation is the emergence of autonomous AI agents, capable of independently performing complex tasks – from optimizing financial transactions to building and evaluating advanced behavioral models and predictions. These technologies bring a new level of automation and efficiency, opening the door to entirely new possibilities for the use of artificial intelligence in a decentralized manner.

Examples of assets: Artificial Superintelligence Alliance (FET), Render Network, Bittensor

Real-world asset tokenization (RWA)

Real-world asset tokenization refers to the process of digitizing tangible assets – such as securities, stocks, real estate, commodities, or other assets – into blockchain-based tokens. This approach increases liquidity, transparency, and accessibility, as these tokens can be traded on the blockchain practically anytime, without the restrictions of traditional market hours. Thanks to tokenization, investors can gain shares in real assets without intermediaries, opening new investment opportunities to a wider audience. Asset digitalization lowers barriers to market entry and enables simpler trading and asset management.

Another significant advantage is fractional ownership, allowing smaller investors to access investments that would otherwise be reserved for larger players. Furthermore, this dematerialization of ownership paves the way for a global investment community – removing geographical barriers and providing equal opportunities for everyone.

Examples of assets: Ondo Finance, Pendle, Mantra

Blockchain gaming industry (Gaming)

The blockchain gaming industry brings a revolutionary approach to digital entertainment, where players can truly own, trade, and manage game assets through decentralized technologies. By utilizing NFTs (non-fungible tokens) and smart contracts, players gain transparent and verifiable access to in-game items that hold real-world value.

The transformation of the gaming industry not only enhances the gaming experience but also opens new economic opportunities for players. They can profit from trading unique digital assets, invest in the growth of gaming ecosystems, and participate in the creation and management of virtual worlds.

These innovations pave the way for entirely new models of entertainment, where gaming also becomes a form of investment and participation in the digital economy. Thus, the gaming industry is no longer just about fun but also about building economic and community connections that create value for players, creators, and investors.

Examples of assets: Immutable X, The Sandbox, Decentraland

Based on our investment philosophy, we analyze the market and perform regular quarterly updates of our portfolio. We carefully select cryptocurrencies based on the following formal criteria:

• Each cryptocurrency must be among the TOP 50 by market capitalization according to CoinMarketCap.
• Each cryptocurrency must be tradable on at least one major exchange.
• All cryptocurrencies must have sufficient liquidity – a minimum average daily global trading volume of at least 5 million USD.