CME CF Cryptocurrency Indices Hard Fork Policy

Covering

  • CME CF Bitcoin Reference Rate (BRR)
  • CME CF Bitcoin Real Time Index (BRTI)

Overview

Virtual currencies, including Bitcoin, are built upon widely agreed “consensus rules”, used to evaluate whether transactions on their respective blockchains are valid. Any change to these consensus rules must be implemented by all parties for the system to function, in particular, by the entities validating transactions (miners).

When a group of entities make a change to the consensus rules, or resist making a change implemented by another group, a hard fork may occur, resulting in the creation of a new token.

The Administrator will evaluate any hard fork against a set of pre-defined criteria to determine whether it is significant

Definition of a Hard Fork

A hard fork has occurred if:

  1. two or more diverging blockchains are in existence post-fork that share the same pre-fork blockchain,
  2. the tokens on the post-fork chains are non-fungible across chains, and
  3. the respective blockchains are actively mined such that transactions can be processed at reasonable speed.

Hard Fork Determination Criteria

For the purpose of index calculation and dissemination, a New Token will be deemed significant if it meets all the below criteria on at least 2 Days out of the first 7 Days following a hard fork.

  1. The New Token Pair must be available to trade on at least 2 constituent exchanges.
  2. There must be at least 100 trades in the New Token Pair across all constituent exchanges.
  3. The  New Token Pair trades at a price greater than or equal to 10% of the combined Price of both the Original Token Pair and the New Token Pair.
  4. The Trading Volume of the New Token Pair must be greater than or equal to 10% of the combined Trading Volume of the Original Token Pair and the New Token Pair.

If a New Token is deemed significant, the Administrator will initiate the calculation and dissemination of an index on the New Token Pair. If a New Token is not deemed significant, such step is at the Administrator’s discretion.

Definitions

  • Day: Any time period from 00:00 am to 23:59:59 pm London time.
  • New Index: A reference rate or real-time index representing the price of the New Token vs. the base currency of the Original Index.
  • New Token: The token that is based on the blockchain with changed consensus rules following a hard fork.
  • New Token Pair: A trading pair representing the price of the New Token vs. the price of the base currency of the Original Index.
  • Original Index: A reference rate or real-time index representing the price of the Original Token vs. a specific base currency.
  • Original Token: The token that is based on the blockchain with unchanged consensus rules following a hard fork.
  • Original Token Pair: A trading pair representing the price of the Original Token vs. the price of the base currency of the Original Index.
  • Price: The volume-weighted average price of a token across all constituent exchanges on a given Day.
  • Trading Volume: The total combined notional trading volume in the respective base currency of a token across all constituent exchanges on a given Day.

Policy Approval

Policy Version 1: December 2017

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