Hey Figue, thanks for opening up a dialogue!
I actually did a bit of scenario writing around governance based attacks or GEV here: [Discussion] Index Token Distribution, Governance attacks, and legitimacy
Generally speaking, I think the basic insight that some sort of GEV market is inevitable is correct, and I think I would support a flashbots-like protocol that is doing its best to externalize, stabilize, and regulate allowable sorts of GEV. I understand that you’re building guardrails, and actively experimenting on what sorts of guardrails would create a stable market.
However, perhaps selfishly, I do not want the Index Coop to be the guinea pigs for what kinds of GEV based attacks could occur. As far as I can tell, the pros and cons of including INDEX on Paladin looks like this:
Pro: Passive holders & treasury can gain some interest rate by lending to Paladin (low benefit, high probability)
Con: There can be some unexpected governance attack on the Index Coop through Paladin’s token market that the guardrails did not foresee (catastrophic risk, low probability)
With Index Coop’s DPI metagovernance, I can certainly see why it would be useful to have INDEX on your platform. However, that same usefulness to you is also a reputation liability for us - if Index Coop is perceived to be abusing its metagovernance power, that could produce a broad backlash throughout the DeFi space.
I would prefer for Index to not be one of the early tokens on your platform.