Overview
Keeping up with the progress in a DAO can be hard work! This newsletter aims to share what we’ve been up to week by week in the Coop, highlighting progress across products, governance and the Index community as a whole.
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Weekly Summary
Liquidity Mining Rewards are Changing
$INDEX Flywheel
December Rebalance Complete
Indexes or Indices?
Assets under vault: $28.15 (-10.2%)
Across 1 product: $DPI: $106.72 (+13.5%)
Index token: $4.04 (-23.8%)
Figures correct as of 6th Dec, (7 day change shown in brackets)
Liquidity Mining Rewards are Changing
If you are providing liquidity to the ETH/DPI pool in Uniswap and have staked your LP tokens on the Index website, be aware that a new distribution schedule starts 12PM PDT, December 7th 2020. IIP-11 successfully passed meaning rewards will drop from 15,000/day to 3864/day. The change comes after data showing the largest trades in the ETH/DPI pool require much less than $60m in the pool to execute with low slippage.
The new distribution will run until 12PM PDT January 7th 2021, during which time the change in number of DPI holders and liquidity providers will be tracked (you can track them too on Dune, see below). Going forward we will target $30m of liquidity in the pool, which allows a $50k trade to take place with <1% slippage.
Make sure to unstake your LP tokens and restake them in the new contract as per the instructions set out here.
$INDEX Flywheel
This week has seen a few discussions on the forum regarding our native governance token. I posted my own thinking in terms of creating a ‘flywheel’ effect where the reasons for rewarding $INDEX form a reflexive loop.
We have the right side of the flywheel up and running already, but rewarding token holders for participating in Index-positive actions is currently missing. By staking tokens and voting on-chain, token holders could be rewarded with $INDEX to help grow their share of governance (like AAVE, Synthetix, YFI etc do). This could be combined with using $INDEX tokens as an insurance of sorts, in case a token within DPI were to fail. Governance and risk-backstopping both align token holder incentives to see safe, long term viable assets added to our portfolio and should be rewarded accordingly.
Not everyone agrees with this view, this post by LemonadeAlpha highlighted that streaming fees are currently accruing in the treasury, and by not distributing them to $INDEX holders, demand for the token is dropping and by extension the leverage we have to provide incentives with the treasury.
They propose diverting the 0.6% streaming fee currently going to the Coop treasury and sharing it between $INDEX stakers who then take on the risk-backstop role mentioned above. The poll is still open for another day if you haven’t checked it out.
December Rebalance Complete
Indexes or Indices?
The answer to the question nobody asked, but it seemed worthwhile to make sure which one is correct as the person responsible for our newsletter! According to Grammarist:
Indexes and indices are both accepted and widely used plurals of the noun index. Both appear throughout the English-speaking world, but indices prevails in varieties of English from outside North America, while indexes is more common in American and Canadian English. Meanwhile, indices is generally preferred in mathematical, financial, and technical contexts, while indexes is relatively common in general usage.
Now if we could just agree to use analyse and decentralise rather than analyze and decentralize…
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