Goldman Creates Digital Asset Classification System With MSCI and Coin Metrics

Coin Metrics, MSCI, and Goldman Sachs jointly created a classification scheme for digital assets, which was revealed on Nov. 3 to promote market transparency and aid market participants in understanding the ecosystem of digital assets.

Market Demands Multiply

The market for digital assets has multiplied in recent years thanks to ongoing innovation brought about by the development of new protocols and applications. Participants in the digital asset space are eager to comprehend this market’s wide range of use cases, allocate funding, and oversee investments.

The demand for performance monitoring and risk management in the markets for digital assets is rising as the asset class develops further and market volatility persists.

To accomplish this, market participants require assistance navigating the world of digital assets and classifying them into subgroups to more accurately describe their risk profile and comprehend their returns.

Datonomy’s Anticipated Market Applications

As the market for digital assets develops, a gap is created, and Datonomy can be used as the foundation for research, analysis, benchmarking, reporting, and portfolio management.

A Goldman Sachs representative told CNBC that the new taxonomy splits the universe of digital assets into classes, sectors, and subsectors based on their use to make it easier to view such investments in a more detailed way.

According to a release, the technology is meant to offer a consistent perspective of the market, screen assets using various filters, and assist market players in “understanding aggregated features of these assets at the portfolio level.”

This new classification system is owned by MSCI, which serves as its only administrator. Other market participants and the datonomy Advisory Board (“Advisory Board”) may provide feedback on possible revisions.

How will Godman Sachs, MSCI, and Coin Metrics be Incorporated, and Where?

Goldman Sachs, MSCI, Coin Metrics, and other outside parties with knowledge of maintaining datonomy will be included on the advisory board and other participants. We’ll make a later announcement on the inaugural third-party members.

To better track coins and tokens and assist investors and industry participants in monitoring the market, investment bank Goldman Sachs (GS) has teamed up with MSCI and Coin Metrics to introduce a new digital asset classification system.

Participants in the crypto market will be able to filter different assets and keep track of developments in various crypto market categories, such as smart contract platforms and decentralized finance (DeFi), thanks to a platform called datonomy.

According to Anne Marie Darling, head of marquee client strategy and distribution at Goldman Sachs, the partnership combines the knowledge and experience of MSCI in critical decision support tools and services.

Coin Metrics’ expertise in digital assets and Goldman Sachs’ innovative platforms with more than 150 years of experience in the financial markets help clients solve this issue.

The new classification scheme is owned by MSCI, which serves as its only administrator.

MCSCI revealed that it would work with Compass Financial Technologies and Menai Financial Group to establish its digital assets indices.

The indices aim to follow the performance of the most valuable digital assets according to market value, as well as those that use proof-of-work consensus processes and those connected to tech platforms that allow smart contracts.

The top 20 and 30 digital assets by market valuation, assets not reliant on proof-of-work consensus, and assets “connected with technological platforms supporting ‘Smart Contracts’ characteristics” will all be represented in the new MSCI indexes. The indices represent a first for MSCI in their category.