OKEx Adjusts DOGE/USD Index Composition Rules

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In a move to further enhance market liquidity and index stability across its margin, futures, and perpetual swap trading services, while also mitigating market risks, OKEx announced an adjustment to the composition of the DOGE/USD index. This change took effect on May 13, 2021, at 18:00 (HKT).

Details of the Index Adjustment

The primary goal of this update was to refine the formula used to calculate the DOGE/USD index price, a critical reference point for various derivative products.

Previous Index Composition

Before the adjustment, the index was calculated using data from the following exchanges and trading pairs:

New Index Composition

Following the adjustment, the new index composition shifted to prioritize USDT trading pairs and included OKEx's own market data:

Importance of a Cryptocurrency Index

A cryptocurrency index price is a calculated average of an asset's price across several major exchanges. It is designed to provide a fair and manipulation-resistant mark price, which is essential for:

Potential Impact on Traders

OKEx issued a risk warning to its users alongside the announcement. During periods of high market volatility, any change to an index's composition can cause a momentary jump or dislocation in the calculated index price and its corresponding mark price.

For traders with open leverage positions or contracts tied to the DOGE/USD index, this could lead to an increase in their position's maintenance margin requirement. If a trader's equity falls below this new requirement, it could potentially trigger a forced liquidation.

To mitigate this risk, OKEx advised users to proactively manage their exposure by:

👉 Explore advanced risk management strategies

Frequently Asked Questions

What is the DOGE/USD index used for?
The DOGE/USD index provides a standardized reference price for Dogecoin derived from multiple major exchanges. This index price is crucial for calculating the value of derivative products like futures contracts, perpetual swaps, and margin trades on the OKEx platform, ensuring fairness and reducing the impact of volatility on any single exchange.

Why did OKEx change the index composition?
The adjustment was made to improve overall market liquidity and the stability of the index itself. By switching from BTC to USDT trading pairs and including OKEx's market data, the aim was to create a more accurate, resilient, and representative benchmark price for Dogecoin, which ultimately helps in better risk management for all users.

I have open DOGE positions. What should I do?
If you have open leverage positions or contracts based on the DOGE index, it is highly recommended to review your risk exposure. Monitor your maintenance margin ratio closely and consider actions like partial closing, reducing your position size, or adding additional funds to your margin balance to decrease your leverage and avoid potential liquidation events.

Will this change affect the spot price of DOGE?
This change is specific to the index calculation on OKEx for derivative products. It is not directly tied to the spot price of Dogecoin on other exchanges. However, because derivatives can influence market sentiment and trading activity, there could be indirect, short-term effects on overall market volatility.

How often do exchanges update their index rules?
Exchanges periodically review and adjust their index compositions to reflect changing market conditions, ensure stability, and incorporate new, reputable trading venues. There is no fixed schedule; changes are announced to users in advance, as OKEx did here, to allow for necessary adjustments.

What is the benefit of using USDT pairs over BTC pairs in an index?
Using USDT (a stablecoin pegged to the US dollar) pairs provides a more direct and stable valuation of an asset in USD terms. BTC pairs introduce an additional layer of volatility because the price of Bitcoin itself fluctuates. A USDT-based index can offer a cleaner and often more stable price reference for derivative settlements.