You can create index tokens using the Glue protocol. This protocol provides enhanced security, sophisticated logic, and dependability. To develop an index token, you need to implement the ratio management and design custom mint and burn logic based on the ERC20 standard.
- Mechanism: Generate index tokens representing a basket of underlying tokens through a specialized minting contract.
- Impact: Facilitates the creation of tokenized indices backed by real assets in Glue.
- Benefit: Ensures accurate index tracking via Glue's arbitrage mechanisms, maintaining proper weightings.
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To better understand the advantages on Glue for your token and your business model you can find out in Understanding Glue
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Using any ERC20 tokens alongside Glue's complex mathematical operations, you can craft your custom Glued Index for:
- Market sectors (DeFi, Gaming, Layer 1s)
- Asset classes (Large cap, Mid cap)
- Trading strategies
- Custom thematic baskets
- Equal-weighted indices
- and more...
For Projects: Extra Earnings Through Index Token Creation
By creating a Index Token on the Glue protocol, projects can unlock new revenue streams beyond traditional token models. Here's how your venture can reap the benefits:
- Minting and Redeeming Fees: Every time users mint or redeem your Index Token, you can charge a small fee. As your Index Token gains adoption, these fees can accumulate into a significant revenue source.
- Flash Loan Arbitrage: Every Glue contract incorporates a flash loan system that charges a 0.01% fee per loan. The more collateral a Glue have, the more revenue it generates within the Glue contract, leading to increased arbitrage opportunities and higher fee income.
- Collateral Yield: The assets backing your Index Token don't sit idle. You can put this collateral to work in various DeFi protocols, earning additional yield. This creates a second income stream on top of your transaction fees.
- Arbitrage Profits: Your protocol can capture value from arbitrage activities that maintain the Index Token’s peg. By implementing your own arbitrage mechanisms, you can turn a necessary stability function into another revenue source.
- Ecosystem Growth: As your Index Token ecosystem expands, you can introduce additional services or products, each with its own revenue potential. This could include lending platforms, yield aggregators, or other DeFi tools built around your Index Token.