> For the complete documentation index, see [llms.txt](https://docs.unitindex.org/theunit/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.unitindex.org/theunit/the-unit/units-selection-criteria.md).

# UNIT's Selection Criteria

Let $$S\_1$$ be the total current supply of the Rank 1 currency (currently Bitcoin), and let $$\phi$$ be the golden ratio $$\frac{1+\sqrt{5}}{2}$$. Then the coins creating UNIT must satisfy the following conditions:

1. Valuation: The 30D average daily market capitalization must be greater than $$\frac{S\_1}{\phi^{12}}\approx\frac{S\_1}{322}$$.
2. Fundamental Metrics: - Volume of Trade: The currency trades widely with at least a year of public trading. - Fees Accrued: The currency or underlying project brings profits to miners, validators, and other verifying participants.
3. Issuance: The consensus rules must define the currency supply.
4. Availability: As a weak rule, 50% of the supply must be available for trading.

## Exclusions in Token Selection

UNIT’s selection criteria focus on including **pure project coins** that provide real, decentralized value. To maintain this focus, we exclude certain types of tokens for the following reasons:

* **Derivative Tokens** (e.g., synthetic assets or pegged tokens):\
  These tokens don’t represent new value, but rather mirror or are linked to other assets. Including them would lead to double counting and distort the index.
* **Wrapped Assets** (e.g., wBTC, renBTC):\
  Wrapped tokens rely on centralized custodians to lock up the original asset, introducing centralization risks and undermining the decentralized principles UNIT upholds.
* **Stablecoins** (e.g., USDT, USDC, DAI):\
  These tokens are pegged to fiat currencies and don’t contribute to the innovation or growth of decentralized ecosystems. Their value is tied to traditional finance, not blockchain progress.