Finance Nest February Update
Author: @Matthew_Graham
F.Nest Members: @ElliottWatts @prairiefi @Hammad1412 @Ahuja @Hammad1412
General Update
During February, Finance Nest was incredibly busy working with the Index Council and each Nest to review and compile the Season 1 budget. Finance Nest working with the Council, was able to present a Season 1 budget that represented a 10.72% reduction in spend relative to the Q4 2021 actual spend figures.
At the end of February, Index Coop’s actual total spend for the month was $572,529.81, with the forecast total spend being $728,070.45. Relative to January, this is a decrease of 11.41% in spend.
Finance Nest believes this forward looking reduction in cost base to be the right direction for the community. Looking forward to the mid-season budget review in May 2022, Finance Nest intends to advocate for a leaner, more efficient business. Proven growth initiatives are to be accelerated and those that are not performing as hoped are expected to be tapered or reworked into higher performing initiatives. We will be continuing to advocate for linking Pods / Nest objectives to growing the business. Finance believes Index Coop to be an on-chain business and this should be reflected in how we pursue growth and view spending.
With respect to the main Treasury wallet, all product holdings were transferred to the Operations Account where they are expected to be sold and used to provide Protocol Owned Liquidity (POL). At the end of February, in addition to the primary INDEX holding, the Treasury held $3,040,314 in USDC and <$500 of ETH2x-FLI. This USDC is expected to be transferred from the Treasury in March when the Season 1 budget is requested.
$265,413 of USDC was spent on contributor rewards for the month of February with a grand total of $314,796 of USDC being spent across the community. Only Core Hires are able to request their wages be paid in USDC and flexible contributors are to be remunerated in INDEX. Less than $50,000 of non contributor expenses were incurred during February.
IIP-134 Index Coop retrospective Airdrop was a controversial proposal. After much discussion amongst the community, the decision of the Council was to move the topic to Snapshot. Finance Nest provided the numbers supporting the proposal and drafted the proposal in line with the communities request. Finance Nest acted impartial and agnostic whilst preparing this proposal. Do note, it is a requirement Finance Nest facilitates providing financial input to ideas from all across the DAO in an impartial manner.
Liquidity
February was a busy month for POL, four liquidity pools were funded on Polygon which was largely funded from internal cash flow from product revenue. At the time of writing we are currently supporting the following liquidity positions $1.4M in INDEX:ETH, $1M via Argent/ZigZag, $413K in various FLI liquidity positions and $211K worth of DPI/USDT on loan to KuCoin.
We are experiencing some challenges in coordinating signers across multiple time zones whilst trying to deploy several products in short succession. Technical challenges with bridges and inability to use Exchange Issuance is resulting in increased signer contact time which is something we look to manage better going forward. Finance Nest acted to amend the signers on the Operations Account to boost the members from Product Nest and more importantly the cross discipline Liquidity Pod. We expect this update to enable smoother product launches going forward.
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. Links to the monthly reports are provided below. Going forward Finance Nest is to begin providing updates on the progress of the DSM program as part of the Core Hire package. We expected to see monthly updates be provided to the community.
We look forward to showcasing what we can deliver as we work through Season 1. 