Finance Nest - A Thread of Monthly Financial Report Publications

I can see why product launches are such a high priority, we have a 90% revenue concentration from two products. Does the finance nest view this as a risk? With experience in a traditional business setting, if we had a 90% customer concentration we would view that as a huge problem. Does product concentration apply in the same manner, or are there other metrics that make this situation different?

Hi @asira,

Yes, Finance Nest does consider the concentration of revenue a risk. Our revenue dips when the ETH prices dips, so if market conditions turn, it is fair to assume revenue will turn as well. This risk is further compound with protocol liquidity as this centres around high vol assets. We are very much running a barbel strategy, lots of risk on assets and then very risk off assets to try balance it out.

The work @ChrisG, @afromac and @allen are doing with launching the first inverse FLI products will help reduce this risk profile. See forum post: IIP-119: Launch iMATIC, iETH, BTC2X, iBTC FLIs on Polygon. We can definitely do with a broader range of product offering and a more evenly distributed revenue base. We are fortunate to have two really strong products and to be growing out the capability to have many more.

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Index Coop - Q4 Financial Review

Finance nest is pleased to present to you the Index Coop’s Q4 financial review. Within this review, we take a high-level look at the financial performance to date, coupled with a review of our Q1 2022 forecasts along with a summary of budget vs actuals.

Please do provide us with feedback on what you would like to see analyzed in our next iteration of this report.

Authors: @ElliottWatts , @Hammad1412 and @Matthew_Graham

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Index Coop - January Financial Review

Finance nest is pleased to present to you the Index Coop’s January financial review on Medium. This takes a deep dive into Januarys’ performance and also provides an overview of our P/L, Balance sheet and N$F statement. Please do let us know what you would like to see analyzed in the next iteration.

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Hi Elliott,

Next month, would it be possible to show the monthly P/L by project?

Cheers,
JK

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We can absolutely provide a breakdown by product. We will incorporate this next month.

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Index Coop - January 2022 Financial Report

Finance Nest is pleased to share the Index Coop’s January 2022 one-pager Financial Report.

At the end of January 2022, Index Coop held $29.6M, of which approximately 67% are INDEX tokens.

Summary

January was a tough month where streaming fee revenue and TVL shrunk by ~ 50%. Operational expenses continue to be the most significant influence on overall profitability. However, with multiple product launches and the overall crypto market showing signs of stabilization, our monthly revenue and profitability are expected to reverse the MoM downtrend of the last couple of months and come back strong.

Index Coop - Treasury Report - January 2022 Glossy.pdf (268.7 KB)

Contributors: @Ahuja @prairiefi @ElliottWatts @Matthew_Graham & @Hammad1412

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Index Coop - February Financial Review

Finance nest is pleased to present to you the Index Coop’s February financial review on Medium. This takes a deep dive into February’s’ performance and also provides an overview of our P/L, Balance sheet and N$F statement. Please do let us know what you would like to see analyzed in the next iteration.

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Any update on providing profit/loss by product?

Finance Nest is pleased to share the Index Coop’s February 2022 one-pager Financial Report.

At the end of February 2022, Index Coop held $25.79 M, of which approximately 65% are INDEX tokens.

Key Takeaways

  • MoM revenue was down 18.7%
  • Gross profit is higher at $111.8K due to drop in LM cost
  • Streaming fee revenue was predominantly driven by ETH2x-FLI, generating $164.3k in fees or 61% of total revenue during Feb
  • February saw the launch of our first inverse FLI products - iETH-FLI and iMATIC-FLI


Index Coop - Treasury Report - February 2022 Glossy.pdf (271.7 KB)

Authors: @Ahuja, @prairiefi @ElliottWatts @Matthew_Graham @Hammad1412

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Finance Nest is pleased to share the Index Coop’s March 2022 one-pager Financial Report.

At the end of March 31st 2022, Index Coop held $42.56M, of which approximately 77% are INDEX tokens.

Key Takeaways

  • MoM revenue was up 2%
  • Gross profit is higher at $172.3K due to zero LM costs
  • Streaming fee revenue was predominantly driven by ETH2x-FLI, generating $155.4k in fees or 56% of total revenue during March
  • $Index price was up 110%
  • March saw the listing of $INDEX and $DPI on Gemini.

Index Coop - Treasury Report - March 2022 Glossy (3).pdf (307.1 KB)

Authors: @Hammad1412, @ElliottWatts and @Matthew_Graham

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@Finance.Nest Any progress on this?

@JosephKnecht Product analysis will be included in the quarterly report, planning to release this next week.

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“However liquidity mining
and impression mining incentives were zero this month,
which have historically been a large cost.”
How come no rewards were paid out for Impression Mining for the month of March?

@Finance.Nest -
Thanks for these reports. I find them to be informative and easy to read. As I look to learn more, it is possible to post up an outline or a links to any operational / investment accounts? I am not looking for a balance sheet or statement of cashflows, but it would be interesting to know where to look if I want to get a better picture of flows in and out of accounts.
thanks

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Hi @shawn16400,

Ethereum Investment Account: 0x462A63D4405A6462b157341A78Fd1baBfD3F8065
Ethereum Operations Account: 0xFafd604d1CC8b6B3B6CC859cF80Fd902972371C1
Ethereum Protocol Owned Liquidity Account: 0x3a36b94689f303aAf9BFE761068Efb8F78912023
Polygon Operations Account: 0xDECC5b013C74d8d3cEf1F8918768DDa17490B505

Do note: The vast majority of transactions are related to the launch of products GMI and icETH, and in providing POL. There is also this github directory which probably is out of date now, but should contain all the wallets addresses. We only just created the POL account and will be moving POL from the Operations Account to the POL Account in time. This will reduce the amount of capital held in one wallet along with a number of other benefits.

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Thank you very much for this!

Index Coop 2022 Q1 Financial Review

Finance Nest is pleased to present the 2022 Q1 financial review for the Index Coop! The report takes a deep dive into the Index Coop financials and performance looking back over the last 3 months.

Here is the pdf version of the report:
Index Coop Q1 2022 Financial Report (3).pdf (4.9 MB)

Or alternatively, grab yourself a hot or cold drink and join your favourite hosts @Hammad1412 and @ElliottWatts to run you through a high level overview of the report.

Below we provide some key highlights from the Q1 financial review.

  • Revenue totaled $877K, down 56% from the previous quarter

  • Total Q1 loss stands at $1.7M

  • The largest contributor to revenue to date is ETH2x-FLI accounting for 59% of the total revenue

  • Our community treasury stands at $42.5M ($INDEX makes up 77%)

  • We have released 7 new products since the last quarter!

  • Total TVL is down 33% from Q4 from $362.5M to $239.2M

  • We have also seen aggregate trading volume on a 7 day moving average drop to $4.43M a 59% decrease

  • Total unit supply for all products increased from 1.9M units at the end of December to 2.9M at the end of March, largely due to the launch of our FLI product suite on polygon. This has accounted for nearly 1M units in March.

  • For season 1 and the first two months of Q1 we have seen an average of $268k worth of spend being paid in stablecoins
  • Stablecoin holdings are $8.7M
  • 33 month stablecoin runway, calculated at the gross burn rate - treasury tables / stables average monthly spend

  • Two standout performers are DPI and ETH2x-FLi which has amassed $5m for the Coop since launch and contributed to 82.68% of total revenue for Q1 of 2022.
  • Also worth noting here that not all of the rebalancing costs are borne by the Index Coop and Set pay for the gas costs, in the coming months set is positioning to transfer this cost over the Index Coop.

You can find the product profitability metrics since launch in the presentation alongside the review for the polygon product suite.

  • Contributor rewards are 11% down compared to January spend (which was the last month before the start of season 1)
  • Other expenses are down by 7% since January largely due to impression mining costs being down 53%

Dive into the report for a budget vs actuals review of the whole quarter.

You can find the detailed financial statements (profit/loss statement, token flow statement and balance sheet) within the report. As always, please let us know your thoughts and if there is anything else you’d like to see in the next iteration.

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Thanks for sharing. One question: the slide with the product profitability BTC2x-FLI2 is missing the rebalancing costs. Aren’t there any?

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I have updated the presentation and slide above. The rebalancing costs for the quarter were $17.15K, and total profit for BTC2x-FLI therefore was $8.53K.

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