Overview
Metaverse Index (MVI) is a tokenized index product created by Index Coop using Set Protocol infrastructure. MVI provides single-token exposure to a basket of metaverse-related cryptocurrencies including tokens from Decentraland, The Sandbox, Axie Infinity, and other virtual world projects. The index rebalances periodically based on a methodology considering market cap and liquidity. While the underlying infrastructure is excellent, the metaverse narrative has cooled dramatically since its 2021 peak.
Smart Contracts
MVI is built on Set Protocol's battle-tested smart contract infrastructure, which has been audited multiple times and manages significant value across Index Coop products. The contracts handle token minting/redemption, rebalancing, and fee collection. Set Protocol's architecture is among the most robust in DeFi for structured products.
Security
Set Protocol's contracts have been audited by OpenZeppelin and Trail of Bits. No major exploits have affected the protocol. The security model is strong — MVI tokens are fully backed by underlying assets held in smart contracts. The primary risk is in the underlying metaverse tokens themselves, not the index wrapper.
Liquidity
MVI liquidity has declined substantially as the metaverse narrative faded. AUM has dropped from peak levels to a fraction of its former size. Trading volume is low, and redeeming large positions may require going through the Set Protocol mint/redeem mechanism rather than secondary market trading.
Adoption
Adoption peaked alongside metaverse hype in late 2021 and has declined steadily. The product serves a small niche of investors wanting passive metaverse exposure, but most have exited as underlying tokens crashed 80-95% from their highs. Index Coop's other products (DPI, dsETH) have fared better.
Tokenomics
MVI charges a streaming fee (currently 0.95% annually) that accrues to Index Coop. The token's value directly reflects the weighted basket of underlying metaverse tokens. There's no inflationary mechanism — MVI is a pure index product. The issue is that the underlying basket has lost most of its value.
Risk Factors
- Metaverse narrative has cooled dramatically — most underlying tokens down 80-95%
- Low AUM and liquidity create potential redemption frictions
- Concentrated exposure to a single failing narrative theme
- Underlying tokens (MANA, SAND, AXS) face their own adoption challenges
Conclusion
MVI is technically excellent infrastructure wrapped around a dead narrative. The 3.1 score reflects the quality of Set Protocol and Index Coop's engineering versus the reality that metaverse tokens have been one of crypto's worst-performing sectors. The index works as designed — the problem is what it indexes.