This post is written with the intention of enticing thought-provoking conversation and to get a feel for the community’s sentiment around introducing an innovative rewards concept.
What if, Index Coop did something a bit different? Something fresh that achieved the same goal but yielded more benefits to the broader community…
Introducing the concept of a Contributor Token Ownership Plan (CTOP).
What is it?
A Contributor Token Ownership Plan (CTOP) is a contributor benefit plan that gives token holders and contributors, the option to purchase IDEX tokens from the Index Coop. Index Coop, by selling INDEX tokens at a TBD discount, is able to diversify some of the treasury whilst rewarding community members for the involvement.
This concept is not new, as it is similar to an employee share buyback scheme, where employees can buy shares in the company they work for with their wages.
But Index Coop already rewards community contributors with INDEX tokens, so how could this idea be applied to Index Coop?
Very easily, a snapshot can be taken. This would determine eligible wallet addresses. We could then build on this concept and further increase the discount factor for those wallet address that receive community benefits from the prior month. So passive holders receive a discount, but active community members who hold INDEX tokens receive a larger discount…
What are the terms?
A snapshot determines who is eligible and the 20-day moving average at time of the snapshot determines the price prior to applying any discount.
How large is the discount?
Well, that is up for discussion.
To kick start conversation, companies raising capital tend to issue stock at between 5-25% based on demand for their stock. For Index Coop, we can simply let the community vote and got with consensus.
Given the volatility of the space, perhaps 15% for passive INDEX holders and 35% for contributors who hold INDEX.
Is there a catch?
It is not uncommon for there to be a vesting period on such an offer. The concept behind this initiative is to align the interest of contributors with token holders. The intent is to encourage contributors to do what is best for token holders and any vesting period not only ties up capital, but it reduces the appeal of partaking just to dump the token afterwards.
Any vesting period is up for discussion, perhaps we start with 2 months as that is like years in the traditional finance world.
There are many benefits and at Index Coop we aspire to innovate, bring the best products to market and creating a thriving culture. By granting INDEX holders and community contributors the opportunity to invest in Index Coop on favourable terms, it would lead to higher talent retention rates, bolster recruiting efforts and create a culture of ownership.
Quoting from one of the links below, “companies that have high-involvement, idea-generating cultures generate an incremental 6-11% added growth per year over their prior performance.”
Some articles that describe the benefits of employee ownership can be found below:
- I like this concept, lets discuss it further
- I don’t like this concept, lets park it