Finance Nest Community Updates - A Thread

Finance Accountability
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Finance Nest December and January Update

Author: @ElliottWatts

F.Nest Members: @Matthew_Graham @prairiefi @Hammad1412 @Ahuja @Hammad1412 @Ahuja

General Update

During December and January Finance nest has been working tirelessly to ensure we are well prepared for the launch of Season 1 from a financial background, throughout December and early January F.Nest has been working with the Index Council to provide a holistic budget and outlook for 2022. This budget incorporates anticipated Nest spend (which will be updated once the proposal process has completed) cash flow predictions and working capital management coupled with a future outlook on potential revenue generated from existing and planned product launches. This will enable the community to better manage financial assets and make informed financial decisions. Finance will be continuing to work with Nests and supporting them throughout the proposal process and also providing guidance as we charter season 1.

In addition to this, we have started to make our stable coin holdings productive in line with IIP-114. We currently have two positions open one in Balancer boosted pools and the other within a USDC <> FEI rari fuse pool. We deployed $2.5m of capital and are expected to earn a yield of ~ 13/18% respectively. This post will be followed by our first iteration of the Investment account update.

IIP-72 has now been actioned by set (2nd February) for all FLI product streaming fees to be directed straight to the operations account. Coupled with this Finance Nest is awaiting action on submitted IIP-116 to redirect all composite products revenue directly to the Operations Account, this has passed IIP and is waiting implementation. This will enable all in-bound product revenue to be actively managed directly from the Operations Account. The intention is to have the Treasury as a pure INDEX token holding wallet and all non INDEX tokens to be transferred to either the Operations or Investment Account in time.

Finance nest also proposed the autonomy act IIP-123 (which passed with a 100% approval) this intends to provide more autonomy for our nest to act in the best interests of the organisation when it comes to stewardship of the DAO’s treasury. This allows us to work in a fast and effective manner. Currently, there is no approval list or standard approach to how/where community funds can be deployed. This IIP gives F.Nest the ability to create a whitelist of approved protocols the organisation can interact with, maintained in Github by this Nest. (We will be providing more details on this in the coming weeks).

Season 1 has started and Finance has proposed its key objectives and success metrics here. Our overarching mission is to provide the organisation with the appropriate tools and guidance empowering the community to turn a startup into a profitable DeFi Citadel. Season 1 sees core objectives of:

  1. Ensure accountability and productive spend to demonstrate impact
  2. Tokenomics and value accrual for INDEX token holders
  3. Ensure the financial profitability and sustainability of Index Coop
  4. Manage funds and ensure smooth disbursement of funds across Index Coop

You will be able to follow the journey through this thread where we will be posting updates on a monthly basis vs our success metrics within this thread

Liquidity provisioning

Throughout December and January the Finance nest has been working with the liquidity pod to process and implement a framework to allow us to provide liquidity to existing and new products. The first liquidity provision made was for $INDEX a total of $1.4m ETH/INDEX pair on UniV3, additional liquidity was provided to $GMI a last minute request due to funding issues with our partner resulting in a tight turnaround for launch. In addition we also provided $1m in liquidity across a number of products on Argent which will likely go live on their their platform shortly.

December and January saw cashflow problems due to unplanned liquidity provisioning and last minute requests, Finance has remained flexible and accommodating to ensure we meet the demands of the community. This has resulted in us working with DebtDAO to open up a line of credit, allowing us to have access to funds when we have working capital constraints, allowing unforeseen costs to be accommodated effectively without impacting other areas of the business.

Reporting

The Finance.Nest governance account is mainly used to publish financial reports and IIP’s. This was created in November to provide the organisation with one account they could look for to provide information on all things financial. In december we posted our Budget v Actual report along with our quarterly financial presentation a deep dive presented by @elliottwatts and @hammad1412. In addition to this monthly thread we will be aiming to maintain an up to date dashboard within the F.Nest notion page to track our success metrics and OKR’s for Season 1 .

The operations account has been very effective over the last few months with multiple Nests realising just how effective the account is, an example of this is how F.Nest have taken on the responsibility for processing contributor rewards, we are now down to a processing and payment time of less than 5 days, a significant improvement on the 10/15 day average a less than 3 months ago.

In addition to the above, the Finance Nest continues to ship financial reporting that is the envy of protocols across DeFi every month. We continue to improve the process providing useful insights to stakeholders across the space.

We look forward to showcasing what we can deliver as we work through Season 1. :rocket:

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