Mar 7, 2022 [FORUM] Owl Level Framework
Jan 28, 2022 [SNAPSHOT] IIP-128: Priority Hiring Round #1
Dec 24, 2021 [SNAPSHOT] IIP-118: Priority Hiring Guidelines and directional commitment to the DSM & Airdrop
Dec 20, 2021 [FORUM] IIP-118: Priority Hiring Guidelines and directional commitment to the DSM & Airdrop
Dec 8, 2021 [FORUM] Community Ownership & Compensation | V2 Proposal
The Dynamic Staking Model (DSM) is an incentive and reward mechanism designed expressly to increase contributor ownership. This aligns contributors’ incentives with long-term price appreciation of the INDEX token by incentivizing contributors to hold INDEX in a way that does not impede INDEX price discovery.
The Dynamic Staking Model (DSM) is an opportunity for Index Coop contributors to earn yield on their INDEX as a way to build more voting power and ownership. The DSM is currently applicable to Priority Hires only per the passing of IIP-118.
Rewards are calculated monthly and will vest in-full after six months, only if said contributor is still actively contributing to Index Coop.
The DSM rewards are calculated monthly based upon two factors, Owl Level and INDEX holding. Rewards are calculated using the average daily INDEX holding throughout any given month (rounded to the nearest whole number).
Contributors (priority hires currently) have already provided a ‘Ownership Wallet”’ which Finance Nest can use to review holdings and calculate rewards. Contributors can only receive their DSM payout to their specified “Ownership Wallet”. Only INDEX in the specified address will be counted. This means no LP positions or other tokenized forms of INDEX will be included, and unvested INDEX will also not be counted in the calculation.
Currently, the only active participants in the DSM are those in the Priority Hiring Round 1. All of these contributors will be at the “Gold+” Owl Level. Owl Levels for all other contributors have been finalized per the Owl Level Framework
These reward rates are marginal meaning that a Gold+ contributor with 600 INDEX will earn yield of:
1 - 100 INDEX: 14.58%, 14.58 INDEX
101 - 500 INDEX: 11.67%, 46.68 INDEX
501 - 600 INDEX: 8.75%, 8.75 INDEX
TOTAL: 70.01 INDEX
The total amount will be rounded to the nearest whole INDEX, so in this case that would result in an accrual of 70 INDEX.
Monthly DSM Rewards will vest fully after six months. A forthcoming proposal will propose that the vesting be changed from a six month cliff to a linear vest.
We imagine we will continue to make iterative improvement to the DSM, with future adjustment possibly including:
- NFT for contributor based on Owl Levels
- DSM staking vault accessible to white listed addresses (or holders of Owl NFT)
- Trial of the DSM for engaged community members
Q: Who is eligible for the DSM?
A: 28 Priority Hires (Gold+ Owls) as outlined in IIP-118.
Q: Will other contributors have access to the DSM?
In March, Finance Nest will estimate the cost for expanding access to the DSM to contributors of Bronze, Silver, and Gold Owl Level status. This will be formally approved via IIP.
Q: Can a contributor update their Ownership Wallet?
A: Yes, you must submit the request to the Finance Nest coordinator via this Google Form. The change will go into effect in the following month. You may not change your address midway through the month.
Q: How much INDEX will be allocated to DSM?
A: Per IIP-128, there is an allocated budget of 179,017 INDEX for both the equity component of the Priority Hires’ salary, as well as the DSM. This equates to 1.79% of total supply. This budget was estimated to last until January 31, 2023. Once these funds are used - any further funding for the DSM and/or priority hire equity will need to be requested via the IIP process.
Q: Can parameter changes be made to the DSM?
A: The Index Council can alter the parameters of the DSM. Discussion on this will take place publicly for at least 5 days. We anticipate the responsibility for approval parameter changes will be delegated to another group within Index Coop. It is important to reiterate that parameter changes do not equal budget approval, and any further funding outside of that requested in IIP 128 must go through the IIP process.
Q: Will INDEX LP Positions or other forms of INDEX be included?
A: No, not at this time.
Q: How will the average daily INDEX be calculated and by whom?
A: Finance Nest will be responsible for calculating the average INDEX held by each DSM-eligible contributor for each month using the end-of-day INDEX held in the wallet (UTC time) using an Excel spreadsheet and Etherscan API.
Q: How will disputes regarding the DSM be resolved?
A: Contributors will be able to file a dispute using a Google Form.
Q: Will DSM participants be negatively impacted if they choose to sell their INDEX?
A: Although the intention of the DSM is to reward contributors with voting power and ownership of the protocol, they are free to use their INDEX however they like. However, unlike traditional vesting packages, contributors who consistently sell their INDEX receive a significantly lower payout from the DSM than those who hold their INDEX. This both reduces INDEX sell pressure and rewards contributors seeking to build ownership in Index Cooperative.