Congratulations on passing DG1 . That is a big step forward. When I think of DG2 - I see it as an opportunity for our community to do a true deep dive into a few of the most relevant issues prior to final confirmation.
Prior to voting to move this index forward, we need to have serious community-wide transparency and discussion around a number of significant questions with DATA. This community due diligence is meant to avoid a repeat of the CoinShare Crypto Gold Index. We are simply at too strong of a position as a protocol to have a major product flop.
Methodologists as Distribution Platforms
DeFi Pulse currently gets over 1 million views a month of their website, Index Coop on the other hand receives 25k. When we say methodologies are distribution platforms that is what we mean. Having a large and active distribution platform is vital for the success of our indexes ( note in the absence of such a platform we need to create it internally which requires MASSIVE amounts of work- see how much effort Paul and AG have spent on Metaverse to make it a success).
In my eyes the primary reason for Index Coop’s success over the past 9-months is the strength of the methodologists we have partnered with. None of our competitors have been able to partner with strong outside methodologists and this is reflected in the lack of traction of these products.
Indexes do not need to be massively differentiated, however, the market segment covered by each distribution platform should be meaningfully differentiated.
- We give external methodologists a very attractive deal 70/30 and part of the methodologist bounty program to attract methodologists with blue-chip data distribution platforms like DeFi Pulse. (note: this is bigger than just website views, it comes down to trust, reputation, brand name, and ability to build quality methodologies)
- If the methodologists do not have a strong platform to distribute the Index then the majority of the support will fall on Index Coop. Organically creating a distribution platform is incredibly hard. Metaverse is a great example of this - Paul and AG have worked extremely hard to support MVI over the past four months and have seen great success even when limited to $256k total on liquidity mining.
Bottom Line: Does the DATA team have a strong enough distribution platform to justify a 70/30 fee split? It seems clear that making this index will require a VAST amount of resources from the Coop. I would like to see more than just support from crypto influencers.
Where is liquidity coming from?
In the original proposal, you mention some liquidity tentatively being supplied by Filecoin and then potentially some support being received from Chainlink. While these communities will obviously be enthusiastic to their token being included in DATA - I don’t think any have enough skin in the game to provide the level of liquidity support needed for a successful product launch. I also do not think we have a firm written commitment from any of them that they will provide liquidity.
I don’t not want us to get in a situation three months from now where DATA has little traction and little liquidity and no strong distribution platform. Leading to our community being in a position where we have to provide LM to support DATA.
There are numerous large-scale LPs out there who are desperate for quality pairs to LP. They are sick of providing liquidity for high emission farms where the underlying tokens have no real value. These LPs would love to provide long-term liquidity for a quality product like DATA.
Bottom Line: What is DATA’s long-term plan to ensure liquidity for this product? We need commitments around who will provide liquidity and how much they will provide. We are running a major blue-chip DeFI protocol - it should not be difficult to run down a few million in liquidity support.
This product has moved extremely quickly through the Index Coop pipeline. At the same time both methodologists have been very vocal in other highly contentious topics in the Coop. While many of these conversations are necessary, the style and tone from the methodologists have introduced large amounts of friction to our community.
This creates an impression that DATA is being rushed through. It also may create significant frustration from community members (specifically our Product Team who were very aggressively insulted - without any apologies forthcoming) - who may ultimately shoulder a large amount of the work needed to support DATA.
If Index Coop is to survive as a long-term project we cannot have highly contentious or aggressive lobbying campaigns that obfuscate the true support a product has and rush the community through the process. Do you believe that the DATA team has conducted itself with a level of professionalism commiserate with our core values?
I fully understand that it takes an aggressive mentality to make things happen in the Coop. I value that about both of you and we will need that same aggressive mentality if this product is going to be a long-term success. With that said we need to seriously discuss some of these issues or they will continually resurface. We cannot completely re-orient everyone’s focus every time we want to release a new methodology.
Numerous community members have reached out to me to express frustration with how the DATA discussions have evolved and how aggressive these conversations feel. We need to step our game up.
DATA will launch and it will be successful. The above questions above are not meant to denigrate the extreme amounts of hard work put into this product up to this point. They are also not meant to erase your very valid frustrations with various aspects of the Coop