As described in the introductory article here, the Index Coop community has immediate access to 5% of the total $INDEX tokens and the remaining community tokens that are vested monthly.
Since launch, the first expenditure of the treasury was funding the Treasury Committee to reward useful work for the Index Coop community. As the liquidity mining program ends in December, it would be great to create additional programs to incentivize long-term holders and growth of the Index Coop’s products. As the focus in the near term is getting to 1% of DeFi, we hope to grow the DeFi Pulse Index’s (“DPI”) holder base and total supply among high-retention users (those who purchase the product for the long run).
Our treasury of tokens is one of the strongest incentive mechanisms we have as it lets us distribute tokens for useful work that reflexively increases the value of the token itself. Among the growth team, we need to instill a culture that is more aggressive about creating programs and running experiments to spend these tokens.
How To Think About These Proposals
Each proposal to spend treasury tokens should have a hypothesis around how it hopes the program will help accomplish a specific goal. As I see it now, the Coop has two major goals:
- Increase DPI Supply
- Increase $INDEX distribution
Increasing DPI Supply is the natural benchmark for any growth program. A growing DPI supply means (holding price constant), a larger AUV, and a larger fee base for the Coop. Distribution partners, like centralized exchanges, will be looking at DPI Supply and AUV as a proxy for the legitimacy of our project and whether or not we are the winners that they want to support.
Increasing $INDEX distribution is a more nuanced objective. A wider distribution helps the governance process have more rigor and legitimacy as the more tokens in distribution among a wider audience, the harder it is to compromise the process. Furthermore, the more individuals that are holding the governance token, the more individuals wiling to evangelize the project, the larger the community gets, and the stronger our marketing. Such a virtuous loop feeds back into the goal of wanting to grow the DPI supply through organic grass roots marketing.
Please mention other goals that you think may be relevant in the comments.
To complement the goals, be sure to think critically about your hypothesis. Think about whether or not the persona you want to target is actually being targeted by the program you are proposing. We have created an excel doc here that maps the buyers journey for the different personas we are currently considering. Think about where in the buyers journey you expect the leverage points to be.
Types of Programs
We want the capital and distribution we attract with these types of programs to be high retention.
As an example, in the case of liquidity mining, neither those buying the DPI to participate, or those earning the $INDEX token by participating, will be high retention. Potentially, a large majority of those that are presently participating in the liquidity mining programs will sell off once the incentives end and are already dumping the $INDEX tokens as soon as they get them.
Another example is a referral/affiliate program that we had specced out here. This program had basically attempted to incentivize content producers to sell the $DPI in exchange for earning a commission in $INDEX tokens. In such a model, the expected retention for DPI is high as those buying likely see strong utility, but the retention for the content creators earning $INDEX is low as they are more mercenary and want to quickly get their money. This proposal is far from fleshed out as there are several technical and game theoretic challenges preventing it from being feasible, but hopefully it serves to illustrate the different personas.
Finally, one can think of a systemized model similar to our treasury program where individuals do tasks from @overanalyser call to action post here and get rewarded in $INDEX. The growth in DPI is 0, but maybe the retention for $INDEX is high since they have to do work and understand the value of the community to earn the token.
UMA Developer Mining is an interesting foray into this design space.
Augur Affiliate Program is an example of an onchain affiliate program.
The design space here is massive and we are really excited to see the creativity of the community be unleashed here! Doing experiments and doubling down on the ones that work is likely the highest leverage thing the community can currently work on.
Excited to see all the proposals that come out here!