DRAFT: IIP-XYZ: Meta-Governance 2.0: Executive Productivity

While I am supportive in trying to unlock the meta-governance value of the Index token. I strongly believe this is the wrong way to go about this.

  1. Any fee return directly to the index (DPI, MVI etc) would be intrinsic productivity and damage much of the work @Metfanmike and the IB team have done over the past year in achieving exchange listing, legal opinions and institutional adoption.

  2. The $INDEX token already presents a governance attack vector against several of the underlying DAOs included in our various indexes. Drawing attention to that fact may galvanize those communities to promote alternative products without such active voting management, or change their governance entirely, removing value from the $INDEX token.

  3. This should not be down at the protocol level, as we have seen with various other flywheels, CRV’s bribes aren’t done by CRV, they are external. Convex’s bribes are external (generally through Votium), Tokemak’s bribes are external (generally through Votemak). There is a project in development to help INDEX holders unlock this bribe value but for the sake of neutrality this shouldn’t be done by INDEX as its sole focus should be crafting and maintaining great products.


I agree with pretty much everything you said.

We believe there is a model out there that can accomplish decentralization and value accrual for product holders.

For example, a Sybil-resistant quadratic voting system could be implemented into the market to protect against these things.

We welcome suggestions and we’re hopeful that we get ideas from the community on a market design that is good for users, the community, and the ecosystem at large.


Hey @oneski22,

This is a really interesting perspective and something we hadn’t fully considered. That said, if we can make our products better, it’s my opinion we should do so. We need to find a way to work with exchanges and institutions, but we can’t be held captive to their demands. Hopefully there is an implementation that allows us to make our products better AND satisfy the institutions’s lawyers.

I don’t see how this would remove value from the INDEX token. Mega-governance currently provides no value for the INDEX Token. Maybe I misunderstood you’re point.

  1. Yep, we agree that this might be better than off as a sub-dao or by partnering with another platform.

Thanks for the thoughtful reply!


Not to open the productivity can of worms, but its the same reason I am strongly against swapping SUSHI for xSUSHI, Aave for stkAAVE and COMP for cCOMP etc in DPI. It makes DPI much closer to a security per present regulations and would relegate our products exclusively for a crypto native audience, causing us to fail our mission of making products “simple, safe and accessible”.

Tribe bought 1% of the INDEX supply to push through the FEI listing on AAVE. We have openly had investors such as 1kx write and speak about the value of the metagovernance and how it was a large part of their investing thesis. IMO the value of the metagovernance power is factored into the INDEX price (not as much as it should in my beliefs, but the market speaks to what it values it at).

My point with this is that we could see a DAO shift their voting token away from the vanilla to a productive version such as Yearn is doing with the shift from YFI → xYFI → veYFI, thus removing any ability for INDEX to use its metagov powers without us addressing the first point.


Gentlemen, love the focus here on building value for product holders and the value cycle. Thanks for the visualisation it helped my understanding. Smart people tackling tough problems is one of the reasons I love this community.

How would this proposal change the current function of the meta gov pod?

The issue of intrinsic productivity <> securities raises warning bells for me so would like to hear more about mitigating the risk/concern @oneski22 identified.

Both @oneski22 and @mrvls_brkfst make good points about accessibility as it relates to our mission to “unlock prosperity for everyone” and just wondering if there is an interim step needed here to improve the current system. I have a colleague that routinely references Galls Law and it really is permeating my thinking

Gall’s Law states that all complex systems that work evolved from simpler systems that worked . If you want to build a complex system that works, build a simpler system first, and then improve it over time.

So in terms of improving the current system. The reason I do not vote more often on meta governance is simply lack of awareness, for the life of me I can’t keep track of the plethora of IIP. My primary barrier to meta gov. voting is awareness, followed closely by timeliness probably 50% of IIPs are closed by the time see and open links.

Could we improve meta-gov turn out under the current system if it was easier to engage on time? Perhaps a simple tool like the Ethereum Push Notification Service could address this, by pushing IIP notifications to wallets as they go live https://app.epns.io/ Just launched, early adopter presence in a web3 native comms tool that I believe will become as ubiquitous as SMS


Hello everyone, Figue, core member of Paladin,

You might have heard about us in this proposal as well as this AMA with Crypto Texan.

Our vote lending protocol is compatible with $INDEX and has been ready for two months. We have not deployed it yet because we believe that its current setup was not compatible with values of the coop and it wasn’t enough value additive for the protocol.

Here are the following challenges I understood from the above messages

  • Meta-governance is globally acknowledged as highly valuable but undervalued and under-used under the current Index meta-governance setup ;
  • Reduce infrastructure cost of running meta-governance while venturing into yield bearing opportunities for DPI ;
  • Maintain the Coop’s values, namely empowering smaller holders ;

I’d like to add :

  • Avoiding extra smart contract risks ;
  • Reducing plutocratic excesses.

Also, some tokens in DPI are simply not compatible with vote lending.

With a regular Paladin Lending pool I believe that Paladin is a solution for almost everything (let me know if you want me to develop some points) outside of defending the Coop’s values.

However, as some of you might have seen with our newest dApp, Warden, we’re committed to build high quality bespoke vote lending platforms for specific tokens / protocols.

Here’s what I have in mind :

  • Enable fractional voting for DPI (let me know if not feasible) ;

  • Create a custom Paladin Pool that allows for vote lending while letting the Coop vote with all unborrowed voting power ;

  • Make DPI the vote lending payment method ;

What do you think ?


Hi @Figue love some of the experiments in governance you have been doing at Paladin.

A few corrections just on the setup of our metagovernance. All power from all products (DPI, MVI, DATA, GMI) are pooled into some addresses which then vote based on the outcome of $INDEX voting.

Would love to connect further with our BD and GovOps teams to learn more about Warden and see if it makes sense with Coop Products in our discord at indexcoop.com/join


Reasons I love this proposal:

  1. It attempts to unlock the incredible power of metagovernace
  2. It elevates a topic (metagovernance) that is not well understood by the community
  3. It demonstrates how difficult metagovernace is and highlight a lot more thinking is needed

Reasons I don’t think this proposal is the right path forward:

  1. IndexCoop trades the market shifting power of metagovernance for non-strategic revenue generation
  2. It abdicates the incredible responsibility of Metagoverance to the market
  3. It puts IC at risk of supporting / enabling nefarious activity

I read the mission of IC “Create decentralized financial products that unlock prosperity for everyone” and ask “how does this bring us closer to this mission” and I think the answer is: it might help cover some operational expenses, but it has the additional risk of:

  1. Distracting IC from mission critical goals
  2. Harming IC reputation,
  3. Causing real damage to our partners and the industry.

Done well, Metagovernance can affect real change. For example, BlackRock quietly uses their investment stewardship (our metagovernance) to literally move Wall Street. Recognizing environmental concerns in 2017, Larry Fink told Wall Street CEOs the “environment matters” to his Index Fund investors. In 2018, he asked CEOs “how are we managing our impact on the environment?” In 2019, he declared “environmental risks and opportunities” were a priority for BlackRock’s investment strategy, in 2020, he stated Blackrock was “exiting investments that present a high sustainability-related risk”. Now that he had their attention, in 2021, he demanded CEOs to publicly “disclose how they will compete in a net-zero economy”.

He was able to move Wall Street because BlackRock Index Funds yields the shareholder voting power of $9 trillion in assets under management. Often the largest voting block across the fortune 500, BlackRock can remove CEOs, change boards, and create new business objectives.

That’s IndexCoop. And that is the Metagovernance power we need to learn how to leverage. If we really want to unlock prosperity for everyone.


Quite the philosophical statement as an org as I see it:
“As a community we’re better stewards of great power than the open market.” You capture it really well here; thanks for bringing this into sharp focus as you have.

This makes me want to really explore how we’ve used the power in the past (and whether the market would just pay for it anyway, net positive, as I see it). I wonder if cause-specific orgs would form and exert influence in the markets should they develop, effectively decentralizing and unlocking the value and allowing influence to express where it is perhaps best exerted?


My views overlap with @oneski22 to a large extent.

Value capture to the product creates challenges.
Allowing our metagoverance to be rented for a single vote may not be in the interest of the underlying protocols. If they see it as a problem, they can look to avoid this (black listing the INDEX coop help tokens, requiring staking to vote).

If I remember correctly, a Maker collateral vote was pushed through by the proposer borrowing tokens (from AAVE?), as a result, Maker sought to prevent lending of MKR on the open market.

Personally, I’m against most bribe mechanisms.

I’m not sure how they will play out for CRV style gauges. But I’m strongly against bribes for governance power. People who vote, should be thinking about long term benefit to the project they are voting on, not a short term gain.

I think INDEXcoop has a value in being seen as a good steward of the tokens we hold for our passive users.

How can we reduce the burden of this responsibility?
Can we remove the snapshot requirements. i.e. send everything to a metagov committee? The downside is INDEX holders don’t get their say.

Maybe we need some system of allowing INDEX holder to identify which meta votes they want to participate in.

Maybe we use inb0x to allow wallets to talk to us.
Maybe we invite INDEX whales to join the metagov committee.

Can we ask the underlying projects to pay us for our service to their governance. e.g. A $UNI grant for being a good and active participant in their governance.


That is correct, additionally borrowed COMP was used to list TUSD and boost its COMP rewards to the benefit of a single whale (Justin Sun its is believed).


Hi @overanalyser,

I wish I was the originator of the idea, but credit goes to @oneski22 and what is presented here may not be accurate to oneski22’s vision. It is an idea, it could be going in completely the wrong direction, or it might get traction. Let’s see.

This idea enables everyone to delegate to earn yield and receive yield. But rather than a lending market, it is more a delegate voting service for good actors.

How does one determine a good actor?
For that, we have stewards and currently the steward is Index Coop’s snapshot process.
In this model, the steward “Blockchain Tokenholder Service” is an external entity that is vetted by Index Coop (whitelist) and one would expect the proposal would need to have the backing of the core contributors at the respective DAO if it was to be implemented. This avoids a lot of the risk from lending markets. Entity submitting the proposal has the support of the community being affected by the proposed change.

By outsourcing this, we essentially use a combination of a whitelist and incentives to drive user flow.

We can enhance the metagovernance reach by enabling anyone to delegate and receive yield. Index Coop can delegate product voting power and can route the flows to those who staked there governance token or even to products with intrinsic productivity enabled. The portion of the voting power belonging to the product that is unproductive would flow to Index Coop Treasury, in addition to a small fee for facilitating all this.

This approach is way more controlled and is not a free market. Index Coop’s reputation is at risk, so this model only acts as an enabler for communities whereby the core team intends to support the change proposal. It has the benefit of enabling small defi holders to sell governance for yield. Ideally someone builds this from outside Index Coop, like we have seen emerge in other communities.

There is gINDEX, so IC folks can deposit INDEX receive gINDEX + yield.
INDEX holders can still vote on metagovernance and Index Coop votes.
gINDEX holders can only participate in Index Coop votes, so no metagovernance voting.
The Yield comes from the Payments/Bribes to use the service.
Index Coop Treasury gets a facilitator fee
“Blockchain Tokenholder Service” receives an payment as part of attracting deal flow


more details on this and a fuller proposal soon ™


gm @lee0007

Thanks for the great questions.

The MGC would be deprecated. Given that the MGC currently executes the votes, operationally it would be handled by the entity facilitating the marketplace.

This question will arise time and again. DeFi is largely about yield and our product users hold their DPI on-chain. Alternatives posed above don’t seek to eliminate yield, they just cannibalize it from user-provided funds and give it to INDEX holders. If our mission is to build the best tradfi products on ethereum I’d say we’re well on track by deferring to geography-based rules. The mission is best products for our users and almost all existing users are on-chain. If the principle of accessibility outweighs long-term thinking, performance, and innovation, so be it. I’ll note that most opposed to IP tend to favor still selling the governance in some fashion and giving fees to INDEX holders, which I find self-serving given that our users provided that value; if we can unlock it for them great, but we shouldn’t just take it.

The proposed system is incredibly simple: Aim our product delegation at a marketplace, give the fees back to users. It’s actually that simple. The market exists and fees can even be paid in DPI. Activists buying DPI drives TVL and doesn’t cause INDEX volatility up and down when activists participate (like it would now).

While I share your frustrations with metagov participation, I don’t share your optimism around increased participation via awareness. The simple fact is that very few INDEX holders vote. Full stop. Way less on metagov. And the sad reality is that even if you or I or even a simple majority of this DAO voted, it would still be 5x shy of quorum and the MGC would decide anyway - we pay a committee of 5 ~$90k a year to have an opinion when there’s a market willing to pay to express those opinions. Metagov 1.0 has mostly been a game for whales and the MGC, but mostly the MGC; otherwise we’ve gotten an integration that benefited holders by proposing on Aave, but we could still retain proposal power in this construct if it’s more valuable to us.

The alternative? We give our product holders back what they trusted us with in the first place in the form of the asset they already choose to hold.

If we can get over the hurdle that a marketplace for governance in what are largely software upgrades is somehow inappropriate I think the product holder support for this may be too overwhelming to ignore given it’s an evergreen source of yield that scales with a growing product lineup.


I may not quite get this, but I am keen to hear more about the steward role - specifically how the stewards are driven by & evaluated on their support the mission of IC. That, to me is key. Metagovernance driven by clear principles and guided by the mission of Index Coop.

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Indeed, INDEX holders are incentivised to want any available income directed to them. (see COMP rewards and FLI products).

A few thoughts occur:

  • I believe that our marketing indicates that many holders don’t care about the streaming fee as they want board exposure to the asset class. So yield is not a buying factor.
  • We have another class (more DeFi native?) who are looking for exposure and yield. Many of the strategies that capture this would not easily capture meta governance power (e.g. xSushi and stAAVE do have governance, cUNI, aCOMP would not ???)
  • If the goal is to attract AUM to $DPI etc by capturing metagov income, then we could use the income to offset the streaming fee (on that assumption that $DPI with a 0% fee is effectively that same as $DPI with a 0.95% fee when it comes to regulators / CEX etc.)

Looks interesting :thinking:

A couple of historical ideas from me.

If the goal is to reduce the overhead of governance (and not capture income from it). Then we could:

  • Delegate to known members of the underlying communities (e.g. $AAVE is delegated to a $AAVE contributor).
  • Some protocols allow an Abstain vote option (Bancor just added this feature to snapshot). This allows passive participation that helps reach quorum and lets the active community make decisions. This may need changes to underlying project governance (and I’m not sure it works with on-chain votes)


In either case, INDEX meta gov only needs to act when there is something we have a strong opinion on.

We could create a web page that lists: Project, voting power, who it is delegated to / default vote. (voting history available on boardroom?). Then third parties who want to influence a vote can contact the coop and open discussions.


What happens if someone borrows DPI’s UNI voting power via a delegate lending platform and does a treasury raid with it ?

What would this do to Index Coop’s good standing within the broader ecosystem and will other protocols want to work with us if something like that occurred. To me the goodwill and reputation damage is inflicted on INDEX holders, not DPI holders. The social liability flows through to Index Coop if something goes wrong.

gm @Matthew_Graham

I would place responsibility for that outcome in this order:

  • Uniswap for providing a protocol-upgrade feedback mechanism with easy access to their treasure
  • Uniswap again for not providing better guardrails given that voting-markets are a natural extension of portable-governance (we’re doing this in the open, everyone will know it’s coming)
  • The person raiding the treasury

That’s it. If protocols don’t like it they can turn off delegation or blacklist, but that will effectively create another permission-layer . . . not very web3.

The implication seems to be that selling votes is OK as long as it’s permissioned, or that we are the guardians of ecosystem voting-power. In my view, it is incumbent upon protocols providing decision-mechanisms to provide safeguards, not The Index Cooperative. We are here to build and ship great products, not get bogged down in some protectionist ethos, and great products make holders more prosperous over time which is really what this proposal does.

You asked a what-if question, and while I agree that Index Coop would be viewed as largely responsible, code is law and we’re pushing the limits of how we can leverage that for users . . . that’s just innovation. We’re already extracting the value from users and have proven we can mishandle it . . . why not give it back to them directly in their chosen asset and let the market be open? If we do this in a permissioned way, someone will just do it permissionlessly and beat us out long term . . . imo.


While I think this is an interesting proposal, I’m not sure it is worth it. A quick look at the Paladin markets for AAVE, UNI, and COMP shows that the yields are all below 0.05% (two of them are at 0.01%). To make matters worse, our contribution would likely dilute the yield even further. If the yields on paladin offer any insight into how much we would make on this strategy, we would likely lose money after gas.

To further complicate matters, integrating with Paladin would require us to integrate it with our planned intrinsic productivity system since Paladin needs its lenders to deposit the governance token in its contracts. If we are going to do intrinsic productivity on DPI (which I personally think we should not), we might as well do a more profitable form of it.

I would also like to reiterate @Matthew_Graham’s point that we should position ourselves as good custodians of the protocols we govern. At the moment, we have a great rapport with many protocol’s core teams, and often make proposals with our tokens. This has allowed us to get support from core teams on our proposals, and code review of the actual on-chain code. So far this has been incredibly valuable, most notably with Aave where we have passed three (somewhat selfish) proposals using our proposal power. As much as we love to talk about decentralization, most proposals would not be possible without the support of these protocol’s core teams and communities. I am sure we will continue to use our proposal and voting power to build on synergies between ourselves and the protocols we help govern, and I fear that selling our votes will quickly make us lose the favor of the communities and core teams of these protocols.