Purpose
The Byte Index serves as the benchmark for investors and managers regarding the performance of the digital-asset market.  The Index captures the general sentiment of the market and creates a basis for investment into the market.
In addition, the Byte Index serves as an ex-post performance indicator and as a proxy for asset allocations.  Over time, the Index provides investors and managers a tool to measure ex-ante return, risk, and correlation of the market.

Principles
Asset inclusion will be discretionary and both qualitative and quantitative measurements will be considered for the index construction.  These include:

1. Basis for an ecosystem with compelling and actual utilities; either as a payment, a storage of value, or ownership.
2. Viability of business and technology, not just a whitepaper, with formal and ethical governance.
3. Tactful and differential mechanism design.
4. Open-source with public audits and code bounties.
5. Sufficient liquidity and availability across multiple reputable exchanges.
6. Active user adoption, participation, or support as measured by fundamental metrices
7. Decentralized and not owned or controlled by insiders.
8. Accomplished and experienced management team, advisors, and stakeholders with history of positive contributions to the community and industry.

Special Situations
Hard Forks – A minimum of 3-month period before a digital asset from a hard fork will be considered for inclusion into the index.  Newly hard-forked digital-assets will be distributed to investors in a timely manner.
ICOs/STOs – A minimum of 3-month period before a digital asset from a(n) ICO/STO will be considered for inclusion into the Index.

Weighting
Equal-weighting has the potential to outperform traditional weightings in the long term.  Reasons include:

1. Greater diversification by capturing opportunities in value and smaller cap assets;
2. Enforces the principle of buy low sell high;
3. Broader participation of upside potentials by allowing smaller-cap assets to gain market shares.

Maintenance
Semi-annual rebalance on the third Saturday of January and July at 00:00 AM GMT.  The index is representative of the overall digital asset economy and will adjust its inclusions based on analysis and committee recommendations to assure meaningful, relevant, and comprehensive coverage.

Calculation