Investment Account - March Update
At the end of March 2022, there was $5M of stables earning 10.75% in interest and this represents only 71% of the capital held with the Investment Account.
The BAL rewards being earned are to be deposited into veBAL and used to vote BAL rewards across Index Coop product pools on Balancer V2. These product pools are in the early design phases and the Investment Account has been position to support this short to medium growth ambitions. Products like LAYER1 which benefit for BAL Liquidity Mining incentives.
There is a delta neutral Protocol Owned Liquidity (POL) position, where ETH has been borrowed to provide icETH/ETH liquidity. Index Coop is earning low signal digits Return On Investment, yield > costs of capital, on the POL. This is the very first POL position where Index Coop does not have any price risk exposure to the assets held in the POL position. The change in the price of ETH has been successfully hedged.
We also expect future upside on this icETH/ETH liquidity strategy with $SPICE rewards from Arrakis DAO when the DAO launches later this year. We anticipate Index Coop to receive a $SPICE allocation as a partner who uses G-Uni pools and creates revenue for the Arrakis DAO. The $SPICE tokens Index Coop receive will then be locked (veSPICE) and used to vote $SPICE rewards across Index Coop INDEX/Product pools.
With Liquidity being a major financial outlay for IC the ability to use other protocol incentives for future products could drive significant cost savings. The Investment Account is being structured in such a way as it will help solve Index Coop second largest bottle neck, liquidity for our products/INDEX tokens.
A link to download the report:
Index Coop - Investment Account Report - March 2022 - Glossy.pdf (127.3 KB)
Report Contributors: @prairiefi @ElliottWatts @Hammad1412 @Matthew_Graham @Ahuja