Authors: @oneski22 @Mringz [Discord: @Mringz | Index, @TrotNixonLine]
Context:
Following on from posts from @Mringz DeFi Partnerships & Integrations Strategy and from @anon10525910 Q1 Growth Analysis & Q2 Growth Strategy it is important that we identify how DeFi partnerships and integrations activities will assist in hitting Q2-2020 growth targets.
According to A vision for Q2-2021 all business development activities should be centered around reaching the following goals:
- $500M AUM
- 400,000+ DPI supply units
- $9M FLI suite 7-day moving average volume for 2 consecutive weeks
- 4 new products launched with $200M+ combined TVL. They are category leaders in terms of the most relevant measure (i.e. uTVL, volume, liquidity)
We believe DeFi partnerships and integrations activities will assist in reaching these goals in the following ways:
- Increase the number of extrinsic productivity opportunities available in the ecosystem for Index Coop products
- Communicate the value proposition of existing extrinsic productivity opportunities for Index Coop products
- Build relationships with defi projects that will enable us to collaborate in creating new products and new extrinsic productivity opportunities
Product context:
@setoshi post on Index Coop’s Exchange Traded Product Business gives a broad analysis of the nature of our products and how they relate to our North Stars/Core KPIs.
| Investor Products | Trader Products | |
|---|---|---|
| Description | Market-weighted indices, smart-beta, equal weighted indices, bond ETPs | Leverage/hedging tokens, volatility tokens, structured tokens |
| Examples | DPI, MVI, CGI, SYI | ETH2x-FLI, BTC2x-FLI, SDI, dVIX |
| Users | Retail Investors, Institutions, DAOs | Traders |
| Primary use case | Sector exposure | Trading |
| Secondary use case | Liquidity mining (LM) & collateral | Leveraging, hedging & arbitrage |
| Revenue model | Streaming fees | Mint/Redeem fees & streaming fees |
| Primary growth metrics | TVL & unit supply | Trading volume |
| Secondary growth metrics | User retention & liquidity | Mint & redeem volume |
Metric drivers:
From the above analysis, we can identify what use cases drive each metric.
| Investor Products | Trader Products | |
|---|---|---|
| TVL | Sector exposure | Trading |
| Unit supply | Sector exposure, LM rewards | Leveraging, hedging, LM rewards |
| User retention | Sector exposure, collateral, LM rewards | LM rewards |
| Liquidity | LM rewards, Trading volume | Trading volume, LM rewards |
| Trading volume | Sector exposure | Hedging, leveraging, arbitrage |
| Mint/Redeem volume | Sector exposure, collateral, LM rewards | Trading volume, LM rewards |
Highlighting the relationship between our metrics and the use cases of our products provides guidance as to where we need to focus our DeFi partnerships & integration activities.
Activities:
DeFi partnerships & integrations activities will be focused on the following activities:
Listing collateral on borrowing & lending protocols:
- Enables users to lend our products to earn additional yield, increasing unit retention
- Enables users to deposit our products as collateral for a loan enabling them to enter into leveraged positions, unit retention & trading volume
- Enables Index Coop to create new structured products, increasing unit supply & TVL
- Enables our products to utilized for yield strategies, increases unit supply & TVL
Listing on Layer 2 (L2) scaling solutions:
- Allows for low fee trading, increasing trading volume
- Allows for low fee acquisition of our products, increasing unit supply & TVL
Co-incentivizing liquidity:
- Enables users to earn additional rewards from holding our products, increasing unit retention, TVL & unit supply
- Enables users to enter into larger positions, increasing trading volume
- Stronger value proposition for pitches to institutional buyers and exchanges, increasing unit supply
Metrics measuring to measure our success:
Listing collateral on borrowing & lending protocols:
- Number of protocols allowing Index Coop products to be used as collateral.
- Amount of Index Products at work
Listing on L2 scaling solutions:
- L2 Trading Volume per product
- % of unit supply on L2
Co-incentivizing liquidity:
- Change in liquidity between start and end of the program.
- Amount of liquidity gains remaining X weeks after the end of the program.
Targets:
Listing collateral on borrowing & lending protocols:
- 4 different collateral opportunities (current: 2)
- 10% of DPI supply at work (current: 3.2%)
Listing on L2 scaling solutions:
- L2 Volume for ETH2x-FLI >15% of Total Trading Volume (current 0%)
- 5% of ETH2x-FLI supply on L2, 5% of DPI supply on L2 (current: 0%, 0%)
Co-incentivising liquidity:
- TBD
Proposed Actions:
Listing collateral on borrowing & lending protocols:
- Document and promote existing extrinsic opportunities for DPI
- CREAM, Unit Protocol (USDP/DUCK)
- Continue to advocate for DPI inclusion in Aave and MakerDAO
- Create Index Coop FUSE pool with Rari Capital
- Publish a proposal for Ruler protocol
Listing on L2 scaling solutions:
- Immediately setup an ETH2x-FLI PoS Bridge to Polygon (MATIC)
- Study Incentivizing FLI/ETH, DPI/MATIC pools on Quickswap/Sushi on Polygon
- Promote FLI and DPI on L2
Co-incentivizing liquidity:
- Assess liquidity of FLI after new parameters take effect to better evaluate the proposed Stakewise FLI/sETH2 Liquidity Pool
- Create a solution for BTC2x-FLI Badger integration (after giving the market time to react to the new product)
Is there anything we might be missing going forward? Let us know in the comments.