ICC Communication on Reduction in Contributor Spend

Governance
1
  • This message was posted on behalf of the Index Council
  • This was first announced to Index Coop contributors at the Leadership Forum on June 22, 2022

Introduction
Since the beginning of this council’s term and the publication of the Open Letter, we have been cutting costs and working towards financial sustainability. Due to recent market events, we are unfortunately forced to accelerate this process.

Our revenue, which is highly correlated with ETH and DeFi prices, has declined significantly. At the same time, our ability to raise money has weakened due to the macroeconomic conditions.

Most recently, we’ve consulted with major token holders such as 1kx, Sequoia and Set. We agree that without immediate decisive action, Index Coop faces existential risk.

Announcement
Today, we are reducing our contributor spend by 40% in order to expand our runway. These budget cuts will both impact flexible contributors and several core hires. There will be a combination of layoffs, salary reductions, and time commitment reductions.

Our objective is to focus on building throughout the bear market, finding product-market fit, and achieving breakeven cash flow by July 2023.

Next Steps
We will make these cost savings immediately through the following actions:

  1. Some core hires will be let go as of the end of June. Those affected will receive 2 months severance.

  2. Some core hires will have their time commitments to Index Coop reduced to 50%.

  3. Some core hires, including everyone on the Index Council, will have their salaries reduced.

  4. Most flexible contributor work will cease at the end of June.

After this meeting, Nest lead or Pod leads will reach out to all core hires to discuss their individual situation. Due to the challenges of time zone coordination, we expect to complete this communication exercise within 24 hours. After all private conversations have concluded, we will communicate an updated contributor roster. Over the next week, our objective is to enable a smooth transition and have honest, respectful conversations with contributors who are leaving.

This is a challenging decision, but Index Coop will emerge stronger, leaner and more agile. Many contributors who are leaving have helped shape Index Coop into what it is today through their dedication and creativity - we owe them a debt of gratitude. Where it can, Index Coop will help them as they look for new opportunities.

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Wow,

Im not sure what to say.

The bear market is brutal and securing the coops long term future is essential.

Its a tough time for us all and I feel for the council (letting good people go is never nice) and fellow contributors who are facing uncertainty.

Since october 2020 we have built a diverse community and so many of us have had opportunities for personal development.

I have always been impressed by the attributes and qualities of my fellow owls and I am sure they (and the coop) will bounce back from this.

Kind regards

OA :owl:

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Hey guys Callen from Wintermute here,

I can imagine this was an extremely tough decision internally, especially when the DAO has to say goodbye to the very people that have played an integral role in its success and development. You have all done a phenomenal job and Wintermute couldn’t be more bullish on IC’s position within DeFi/crypto

Ultimately, we believe that this was the right decision and is necessary for IC to reach its full potential

For the contributors leaving we wish you all the best and hope to still see you around

For the remaining contributors we look forward to seeing you build in the toughest of times

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First and foremost, DAO contributors are the best breed of people: fearless experimenters that help to push boundaries and innovate.

Every contributor should be proud of the work they have done at Index Coop, including:

  • Building a framework for DAO coordination that has been used as a playbook across the space
  • Creating a suite of structured products that showcase the abilities of DeFi while helping the average investor make sense of it all
  • Operating a culture of inclusiveness and sincerity that resonates with each new member of the Coop and exemplifies the ethos of web3

Experimentation is not without risk, however, and sometimes these risks materialize. It’s no secret that crypto is an inherently volatile and cyclical industry. While we don’t have the ability to control the market, we do have the ability to control our reaction to it. It’s unfortunate to see such a deep reduction in contributor spending, but it’s necessary if we want to see the organization we’ve collectively strived to create succeed in its first true economic test.

It’s also important to note that Index Coop is not the only web3 organization facing these headwinds. For example, Yearn announced a similar plan just a few days ago. This is industry-wide - not a failure of the Coop. The best plan of action now is to bunker down and build.

We are in support of the actions taken by the Council here, and hope that contributors across the Coop understand why it is vital to the DAO’s longevity.

While the financial incentive may be reduced or removed, we hope that contributors continue to participate in the Index Coop ecosystem. By permissionlessly contributing, building, and growing the ecosystem, you are facilitating Index Coop’s transition back to financial surplus.

How we plan to help those affected

If you are impacted by these changes, please reach out to us. We know of many great projects that are looking for help even in these uncertain times. If you plan to instead use this opportunity to build something new, we are also here to support you. Let us know how we can help, and we will gladly seek to accommodate.

Let’s play long-term games with long-term friends together.

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