Digital asset classifications are based on the primary use of the asset and its parent protocol, as defined by the project creators and what is widely observed in the market. This is fundamentally different from classifying based on the technical architecture of how a protocol is designed or what rights a particular asset provides to its holders (e.g., governance voting). Assets classified within a sub-sector may exist on blockchains with different design choices, such as “Proof of Stake” vs. “Proof of Work”. Some may leverage a ‘parent’ or ‘Layer 1’ blockchain, while others are hosted on their own blockchain. Each asset aims to facilitate a primary use-case, and the technical implementations are a means of facilitating that use-case.
As digital assets become eligible for classification, MSCI will initiate an independent review process. A determination of use-case and Taxonomy classification will be made using a mosaic approach with the support of a variety of data sources. This analysis will be documented and presented to an MSCI committee of senior researchers for review and approval before final classification decisions are made by MSCI and implemented for distribution.
MSCI will, at minimum, review the taxonomy structure annually. This review will include input from the datonomy Advisory Board members and commentary from market participants. MSCI may decide to perform ad-hoc reviews of the datonomy structure on an as-needed basis.
The datonomy Advisory Board is Co-Chaired by MSCI, Goldman Sachs and Coin Metrics with membership open to select industry participants and experts on an invitation basis as agreed to by the Co-Chairs. The Advisory Board provides expert Input that MSCI may use as a source of information in connection with administering the Taxonomy, including information and insight with respect to industry trends, technologies and any other information relating to the Taxonomy. The Advisory Board members will also review and provide feedback on asset coverage universe, asset classifications, consultations, and Taxonomy structure evolution on an as-needed basis.