Formation of a Protocol Ownership Kick-Off Group

Authors: @BigSky7 @ncitron @DarkForestCapital @LemonadeAlpha @jdcook @verto0912


The Index Coop is in the middle of the next major phase in our growth. On Wednesday July 14, 2021 we held a focused call on autonomy issues that had been brought up by many Index Coop members.

Part of that conversation included questions around “protocol ownership.”

Those questions have not yet been answered, and remain critically important. This is a big topic that will take time to figure out satisfactorily. When we successfully navigate this as a community, we will have taken yet another massive step forward together. We believe we can do this if we keep our guiding principles and work together :owl:

The big takeaway from the conversations surrounding Autonomy, as well as subsequent conversations is a need to revisit the genesis token distribution. We mean it in a very broad sense and believe that all options should be considered. Simply put, the Coop has matured beyond the genesis vision. It has evolved an ambitious, impactful, and well-intentioned community that is ready to take the next step towards positioning itself to autonomously drive economic, social, and organizational development. Now, most contributors feel frustrated by a lack of ownership of a DAO they have helped build.

Change could be enabled by standing up a team of key stakeholders, just like the Formation of the Autonomy Kick-Off Group.

This elected group would take leadership over this topic. It would identify and drive forward key initiatives needed to instantiate whatever outcome(s) are eventually aligned on.

Initially, a major part of this effort could center around a “Protocol Ownership Roadmap” to be jointly created by the elected stakeholders.

Guiding Principles

Here are some guiding principles as we navigate this topic

  • Long-term thinking: We do things for the long-term benefit of the cooperative, our users, and the community.

  • Fairness: We will do our best to effectuate what is fair

  • Stand on the shoulders of giants: Other DAOs have figured this out, we will look to their distributions for guidance. Research on these distributions has already been started and will be shared with the nominated group.

  • One-shot: We have got to get this right as a community right now. It will be even harder to revisit this a 2nd time.


Key Proposed Action: Formation of a Protocol Ownership Kickoff Group

Deliverable: Initial protocol ownership roadmap

Proposed Group Structure

  • Lead: 1 Unbiased 3rd Party (Recommendation: 1kx)
    • Having 1 unbiased 3rd party is viewed as very important. It must be acknowledged that all Coop contributors have an elevated conflict of interest in this discussion. We need the leader of this conversation to be as unbiased as possible. It is worth noting that 1kx is invested in both Index Coop and Set Labs but they have consistently acted as one of the most community forward investors in DeFi. Therefore, it is our recommendation and preference that 1kx takes this on.
    • Finding an unbiased third-party (or third parties) who also has enough context and understanding about Index Coop is inherently difficult. A 3rd party unrelated to Index Coop could take much longer to get up-to-speed and could, in the end, miss valuable context in making a recommendation. We are open to other 3rd party suggestions and may potentially need to include a second independent 3rd party.
  • 3 Community Contributor Representatives (this includes contributors of all stripes, such as: contributors, community methodologists, prospective community methodologists, working group leads, full-time contributors)
  • 1 Set Labs Rep

We believe that 5 is the optimal number of individuals for this group to make rapid progress with representation from the major core stakeholders

The initial roadmap they produce will ultimately be subject to full community scrutiny in the forums.

Nomination & Selection Process

We will run a nomination & selection process similar to Autonomy Kickoff Group.

Dates/specifics will be determined after the community has had time to weigh in on this forum post.

Final Thoughts

We would like to ask everyone to provide feedback and share any reservations they might have. If you want to suggest a different independent 3rd party, please do so in the comments. If you think the size of the group should be bigger or smaller, please let us know. I believe we are all aligned on the need to get this right.


Thanks for this post @verto0912 - I strongly share the sentiment that revisiting genesis token distribution is critical area for our community.

It also seems sensible to have several high context contributors dig deeper on this question - and I would be open to a third party leading the discussions assuming no conflict of interest.

How do you see this group interacting with the Autonomy Group? I’m concerned that Protocol Ownership is one aspect of Autonomy.

Is their a risk that running two parallel groups with similar remits would be confusing. I say this especially given @Matthew_Graham has already shared some thinking around this topic.


Hi Joe, we considered the possibility of the Autonomy Group taking this on. Personally, I am against that for the following reasons:

  • It was not clear, at least to me, from the Formation of the Autonomy Kick-Off Group post that protocol ownership was within the remit of this group. That information would’ve influenced my nominations and voting.

  • From my perspective, the autonomy group has a broad mandate to identify areas where autonomy is needed and come up with a roadmap map to get there. I think we have clearly identified that protocol ownership is an issue. Now we need a more specialised, focussed team to deliver an outcome.

  • Based on feedback, protocol ownership is a critical and urgent problem. It would benefit from a more narrow focus. Further, I would suggest that digging into token distribution requires a different skill set than setting the big picture strategy for autonomy.

  • Lack of an independent party on the autonomy group worries me when it comes to revisiting the genesis token distribution.

At the end of the day though, this is the community’s decision and we can always have a poll or discuss on the Wednesday call whether this should sit with the autonomy group.


Hi @verto0912,

My thoughts resonate with @Pepperoni_Joe here. I have expressed my concerns around 1Kx privately and those concerns are alluded to above. For transparency, I’ll share my concerns. 1Kx is an investor in both Index Coop, Set Labs but not our largest partner DeFi Pulse (no VC investors). A profit driven firm, even with best endeavours, is subconsciously incentivised to shape the ownership and wealth accrual towards their largest investments.

I don’t have a neutral entity to put forward. Silly idea, but what about Fire eyes, DCInvestor and approaching other known entities. Perhaps reaching out on Twitter or other networks for recommendations.

I disagree with this approach. I went into the autonomy discussion with an agenda to fix community ownership. It is the single largest problem from which our autonomy issue originates from, IMHO.

The autonomy group already has @setoshi , who better is there from Set Labs ? Same applies with @Etienne from DeFi Pulse. Token distribution was already raised on the agenda in the autonomy group. Furthermore, if we create an Ownership group, I suspect the same people will nominate.

To me tokenomics, ownership and process autonomy are all in one way or another an incentive scheme to promote the community behaving a certain way. These things are all interrelated. Fragmenting them into separate topics creates another interface to contend with and their heavily interwoven topics, so the success of one group is linked to the success of the other and the progress of both dampened by fragmentation.

Pivoting on the autonomy group to include another person/entity is a more candid approach. Although, I don’t think it is warranted.

Tokenomics (incentives behaviours through token distribution mechanism), decentralisation (lots of owners with similar relative ownership), and organisation (Community drive by behaviour/exertion incentives).
If the urgency is great, then we really only have 6 vesting contract and 1 methodologist incentive programs to pause and then figure out what next.

Regarding analytics, I did the deep dive back in February of 2021 and TWG is already working with AWG to bring all of this to dune. Top Holders is the obvious one, pulling in all LP positions etc… Then analysis like Gini Coefficient can be done. We can watch the trends, we’ll know if LM equals dumping on market, if Full Times dump all their tokens prior to receiving vested tokens (completely rational btw) and if contributors sell INDEX post receiving there contributor rewards. It will give us a feedback mechanism on all our INDEX distribution campaigns. With this work already happening via TWG and with tokenomics flagged 28th June in the TWG proposal as potential scope perhaps some are catching up with the urgency of the topic. It starts with understanding the data and then having informed discussions.

My thoughts are Protocol Ownership is Autonomy Group scope. It is also partly the reason why I put out the forum post around community ownership. It enables the Autonomy Group to gauge community sentiment and feedback, and incorporate this into the discussion.

Maybe the Autonomy Group needs to be run more like a sprint rather than a marathon and devoting more time to it is needed.


I would echo Mel’s concerns from the “What is autonomy?” post.

@mel.eth, apologies if I’m misrepresenting your views. My concerns are with the seemingly meaningful scope creep of the autonomy group. Perhaps this is due to the scope never being clearly outlined. But I see the delivery of the “Initial Autonomy Roadmap” by 25 August as the end goal of the autonomy group’s mandate.

Should we do the following:

  1. Pause the autonomy group
    (seems like we don’t know what the scope is)

  2. Define how many groups, how many people per group, timeline of deliverables, scope of work and rewards.

  3. Hold elections

Seems like there is misalignment over scope, deliverables and expectations here. So perhaps we need to step back, reset and then go again.

@mel.eth @Pepperoni_Joe @verto0912

I’m definitely against fragmenting all these discussions as they’ll all drift in there unique direction skewed towards seperate goals. This is a holistic topic through my eyes.

Furthermore, the DATA proposal lights an economic fire under part of this discussion for urgency here. Which is something DAO governance does not do well.

We also need a replacement for 1Kx who is neutral. Ie: is not an investor in either INDEX or Set Labs or DeFi Pulse.


@Matthew_Graham I am in support of this suggestion.

There is clearly a misalignment within the community on the purpose of the Autonomy Group which undermines its legitimacy and makes its existence untenable. I echo the need to step back and reset.

@mel.eth its seems clear you have a view on what the Autonomy Group should be doing and feel our scope now far exceeded the initial remit. Given this, I wanted to direct your attention to the initial Formation of the Autonomy Group post:


Agree with the objectives of autonomy and protocol ownership but also agree with Matt’s comments around them being interrelated. I’m already beginning to feel like I’m losing track of which group is doing what.

Just to add another idea to Matt’s list

  1. As the authors of this post are FT’ers and already a representative group. Would it make sense for @DarkForestCapital to represent them as a collective in his role on the autonomy group? (assuming he has capacity and would be happy to)

Shouldn’t we wait for the actual output and recommendation of the elected autonomy group before we take action based on “takeaways” from their work? I actually like the suggestion of a focused group, but feel a little “group formation/election” fatigue for something that’s quite interrelated with the on-going work of an elected group. I think this proposal should be considered as feedback to that group and then separately considered after 8/25.

It feels like a weird time for a proposal authored by all of the full-time contributors given on-going conversations about autonomy and governance related to that structure. Just one data point, but it undermines my own trust in the motivation behind the proposal. Also the proposed structure is 1kx (functionally aligned with Set), 3 Community Contributors of “all stripes” (but 1 named stripe is Full-Time Contributor), and 1 person from Set. I feel bad pointing this out, but I feel obligated to share that the nature of the proposal and timing is suspicious. It just further contributes to the perception that FT contributors set themselves apart from the rest of the community and (I REALLY hate saying this part) may be acting disproportionately in the interest of Set. And this is from someone who generally DOESN’T believe that.


As someone who has worked hard to get this conversation moving forward and pushed to get this post out - I want to highlight the intent from my perspective.

Everyone in our community has been talking for months about the need to do an equitable redistribution of the INDEX governance token across all the contributors who have helped shape the DAO.

I firmly believe that the more we can push protocol ownership into the hands of everyone in the community the better. We are fundamentally a community of equals.
This is a major step we need to take as a protocol. I am cognizant that many people are working in an essentially full-time capacity for this protocol, the sooner we can get a group of community members together to solve the issue of token distribution the better. Everyone who is building this DAO into a powerhouse deserves an ownership stake in the protocol.

I would love nothing more than for us to have a situation 2 months from now where we have a plan in place for every proven person who is working in a full-time or semi-full time capacity receives a significant % of protocol ownership on some vesting timeline. That is a reality I think we can work towards and make happen.

Our protocol has had a ton of success forming small, well-organized groups to tackle some of the most difficult problems we face. In my eyes, this is a winning formula. Any recommendations this group makes will be further debated and eventually come up for a vote in the form of IIP. I see this post as kicking off the discussion- this is an important discussion which is why we asked all the FT contributors to sign it.

This conversation clearly ties closely into Autonomy - but is massive in scope and encompasses both retroactively rewarding community members and proactively laying the groundwork for future compensation. The scope of the Autonomy working group is large enough that we should not expect them to solve every problem our protocol faces.

When it comes to who is in this group. The specifics don’t matter. We should encourage the full spectrum of community members to be on it. We have enough super smart and engaged people working on improving our protocol that I am sure that if a few of those people committed to working on solving this problem we will be in a 100% better position in a few months and have a clearer understanding of potential options. We have enough people in our protocol with deep context to engage with and solve these problems.

I don’t think we need a vote right away, that might not even be the right construct for solving this problem as a community - if 4 or 5 community members want to put themselves forward to help solve this and reach out to some third parties to get a second group of eyes on this that would be a huge win. I would say that the majority of contributors and people on this thread are fully engaged across the entire protocol - we need to start engaging with more community members to help solve these problems.

Lot’s of people from across our organization are thinking about how to solve this problem in the best way possible. Fairly distributing INDEX ownership to every contributor is one of the most important problems for us to discuss and solve. It will require input from everyone and working together organically to collaborate and solve.

Bottom line: The only thing that matters is that we come together as a community and start solving this problem.

Final note: If this post feels too prescriptive that is great feedback! Everyone in this organization is working and learning together. We are all refining how we come together as groups and organize major protocol level initiatives. Clearly this entire process is a work in progress - no-one is perfect here and we are iterating as an organization.

We need to focus on building trust across our organization. There isn’t a single person in this thread who I wouldn’t trust with all my private keys. If we don’t assume best intentions and mutual trust we wont get anywhere.


Can you expound on why you feel this way? I am not understanding how this post coming from the FTs would have this effect?

How do we set ourselves apart from the community? Why does that perception exist?

And why would would it be in our interest to act disproportionately in the interest of Set?

If you generally don’t believe this, why do you believe this now?

Your post was generally depressing for me personally, so would love to understand your POV better and what we as FTs need to do to regain your trust and confidence. Also, not really sure where that was lost.

I think we just saw this as an effort to push forward one of the most pressing issues that we face and let all of us collectively figure it out. Our motive is simply to get more ownership in each community member’s hands in the fairest way possible.

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Sure, this conversation is ongoing currently. And it’s the primary reason I have this dynamic top of mind now. It’s an ask to give the benefit of the doubt to the Full-time Contributors and accelerate governance power into their hands. As you see in the thread, I support it with a 6-month cliff (preferring a more linear cliff but concede that the difference isn’t worth significant engineering resources). Others do raise concerns about the relative fairness of the Full-time structure.

In the formation of the Autonomy Group, I also said the following:

So from my perspective there’s (1) a proposal from a group of authors who are seemingly only unified by their compensation structure within the Coop, (2) who (used to?) meet regularly with Set to make decisions on behalf of the Coop (something I raised as a concern in the Autonomy Group setup), (3) drawing conclusions from the yet-to-be-completed Autonomy Group’s process that they were elected by the community at large to complete, and (4) doing so with a group composition proposal that seems very structurally favorable to Set. All while there’s ongoing conversation about the relative fairness of that group’s compensation and governance power. That confluence undermines my trust that those concerns are taken seriously by the authors.

But I also genuinely could see how that might be coincidental. That perhaps it just isn’t something you guys see as an issue. And I’ll acknowledge my words were overly vague and slanderous. I regret that, but not the sentiment. Because it still strikes me as relatively tone-deaf.


I hear that. Cheers. The most direct feedback I have is:

  1. Let’s respect the Autonomy Group’s process. And the effort the community put into getting that group together. I want to hear what they have to say about how this should be tackled first. If this has been pulled together with that group’s blessing then great! But this does feel like it’s jumping that gun.

  2. I don’t think an investor in Set can be considered unbiased here. They may have the best intentions in the world, but it’s just a factual disqualifier from that characterization. If we think 1kx is right for the job IN SPITE of structural bias, then that’s a different story. But to call them unbiased is to distort that word’s meaning. I’d want to see more work here on who’s right for this job. And happy to take that conversation offline.

Otherwise, I like the idea.


I think this unfair and just want to voice that the notion should be squashed. No one should feel the risk of being labelled as tone-deaf for putting forward a proposal that gives full power to the community to direct its mandate.

The whole reason this was proposal was brought about and formatted as such was because we take the concern seriously. We just felt like it was an important issue but the proposal gives full power to the community to direct its mandate.

It clearly states that 1kx is a recommendation due to their strong history of thinking and leadership around these topics, but that anyone is free to make another recommendation. We gave reasons why we think 1kx could be a good fit, but that is all that is - a recommendation. I just don’t really see how you read that and decided that FTs were trying to pull one over on the community in favor of Set. If you don’t like the 1kx recommendation then nominate another 3rd party. If you don’t want a FT contributor on the team, then don’t vote for a FT contributor to be on the team. The accusations that FTs were trying to stack this for Set are unfounded given how clear it is in the original post that this structure is a recommendation and will be molded as the community sees fit. As Simon said, the specifics of who are on the team are not that important - just whoever the community feels will do the best job at delivering. That was always our intention.

The reason that I am pushing back on this is because it is just plain false. The authors only motivation was providing a path whereby a team could be chosen that delivers the strongest results.

This is where the core discussion should be. Is this a mandate under the Autonomy Group? I think I am in agreement with the following sentiments:

It doesn’t appear that this specific initiative is within the Autonomy group’s mandate. Which is why we felt important to get a team working on it as soon as possible. I don’t think at all it is a disrespect of the Autonomy Group’s process.

Lastly, I really hope the accusations and concerns around the authors of this proposal can be dropped. The original post is clear that this is simply a call for the community to agree that we need a team focused on this problem, and it is up to the community to determine that team. And I hope it can be clear that the reason this was posted by the FTs was that we want to get more INDEX into every contributors hands so we have fairness, ownership, empowerment, and governance power. That is it. That was the motivation.


@jdcook there are three senior people within Index Coop voicing conflict of interest here. This go find an alternative approach might as well read Full Timers way or the highway.

Shall we kick off a search for a incredibly neutral entity, assuming this WG is even needed - I don’t think it is.

Concerns were raised in the Working Group lead chat. Full Timer’s chose not to respond and pushed this forum post to the forum. It is their choice. I was asked to let this go through quietly on the forum. With how @jdcook responded, I think we are going to see the class divide narrative gain strength and people will dig in to oppose this all the way.

I noticed no single Full Timer addressed the other forum thread around Year 2 and Year 3 Set Labs Vesting contract . What are your individual views ? However, there were multiple Full Timers voicing the need to pay forward their own governance rights. The silence was deafening on the Year 2 and Year 3 vesting contract topic and the voice was loud when it came to a governance influence pay day.

Full Timers receive something in the order of 90,000 (6ppl 0.15% each) if the 2 year vesting governance is paid forward and this forum post implies this is a block vote.
1kX has 100,000 votes.
1Kx and Full Timers become the swing voters in any election with voters at the margin determining the outcome.

It is probably not the intent, but game this forward and it looks like governance capture.

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This is laughable. The only 2 people from the entire community who commented specifically on the Year 2 and Year 3 Set Labs Vesting contract are @Metfanmike and @mel.eth. The silence is indeed deafening but from everyone. Don’t single out a group of people to fit your narrative and agenda.

My individual view is that the suggestion is warranted and should be considered & discussed. Just like any other suggestion that comes from the community. However, instead of everyone putting out their preferred solution to revise genesis distribution on the forum, it makes more sense to me to form a group tasked with figuring it out. Which is what this post is about.

A case can be made that this sits with the autonomy group. As I said above, I personally feel there’s been a meaningful scope creep and I provided my thinking on why we need a separate group to handle token distribution.

This is another funny one. No one is pushing anything forward without consensus. If we can’t agree on a third party or anything else regarding this proposal, it doesn’t go ahead. I apologise for asking for feedback, it apparently is viewed as an attempt at governance capture.

Struggling to follow your logic here. The proposal to allow FT to vote with unvested tokens was an attempt to increase governance power by the community, which has been raised as an issue. It was acknowledged in the post that it’s a small step and more needs to be done. The community provided their feedback on that post with two main comments being that cliff might be appropriate and that some community members were not supportive of the initiative at all, even with the cliff. At this point, we can either revise the proposal to include the cliff or table it completely.

I don’t see what in the above process is problematic. That’s how decentralised governance works. A proposal goes up, community comments, revisions are made or a proposal is tabled. Seeing nefarious intentions just because a proposal comes from a certain individual or a group of individuals is detrimental to our DAO. There’s no empathy in that approach, it’s not data-driven and it’s not long-term oriented. These are some of our guiding principles that, I hope, still represent the fundamental beliefs of this community and how we work together.


I said the proposal is tone-deaf. I stick by that. I could just as easily say I’ve now been “labelled as unfair” for voicing concerns about the full power of the community being funneled through a structurally biased third-party, Set Labs, and individuals who meet with Set Labs on a weekly basis in an opaque fashion. I say that without any comment on the individuals who fill those roles. They’re simply factual. I’m inclined to trust those individuals and give the benefit of the doubt, but the manner of this proposal and the reaction I’ve gotten for voicing that concerns erodes that trust. If there’s no place voicing that concern, why do we even have a forum?

One question, if answered, that would go a long way towards addressing this concern. Was this proposal discussed with or shown to (in draft form) anyone from Set or 1kx before it was posted?

Who asked this? Why?

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I am in support of this protocol ownership group. I agree with @fallow8, I do recommend it forms after the conclusions of the autonomy group. However, I do recommend that this group does more to communicate clearly about the process and clearly highlight the mandate to the community.

I believe there have been failures of the current autonomy group to do that, and those lessons should be learned and applied as this group is formed. I respect the job the group has done thus far however it is clear that there have been issues. In the report from the autonomy group I would expect a post mortem that highlights what these failures are, why they happened and what we can do to improve them as we move on to the next phase of this process.

Looking at conversations around autonomy, I think as a community addressing this problem we have not done the best job to build context around the issue, If a better job has been done around that I do not think we would be having these misalignment issues.

@Matthew_Graham I do not like this demonization of Full-Time contributors as I have absolutely no doubt this post was created with the right intentions to accelerate progress on a vital topic.

Protocol ownership was a major theme of the Set Autonomy discussions - and so I would have loved the Autonomy Group to be engaged earlier when drafting this proposal.

That being said, I remain strongly in favor of standing up a dedicated group to dig deep on Protocol Ownership.

My personal recommendation (cc @Matthew_Graham, @Etienne, @DarkForestCapital, @setoshi) is on the 25th of August, the Autonomy Group:

  • Shares our “Autonomy Roadmap” which lays out a plan for how we address key challenges faced by our organization.
  • Provide a proposal outlining the future scope and structure of the Autonomy Group.
  • Provide a recommendation for how to stand up a “Protocol Ownership Group (POG)” and define how the Autonomy Group will work with this POG.

The community can review our work, and will vote on whether to:

  • Dissolve the Autonomy group
  • Approve the revised scope and structure of the Autonomy Group (to be called “Index 2.0”)

There may be differences between what our Full Timers and the Autonomy Group thinks is the best way to proceed regarding standing up this Protocol Ownership Group.

If so the community can vote on whether to…

  • Progress with the formation of the Protocol Ownership Group as outlined by the Autonomy Council
  • Progress with the formation of the Protocol Ownership Group as outlined by the Full Timers on this post

This will give the community some clearly defined options - and provide a “vote of confidence” in the Autonomy Group based on their outputs up until 25th of August and outline of proposed next steps.

Please indicate your support for this approach?
  • I support
  • I do not support

0 voters

@Mringz, agreed that the Autonomy Group has failed to bring the community on the journey and has been too quick to jump to the solution. We have learnt that lesson, but we appreciate that our community may no longer feel this group represent their interests.