IIP-138: MVI Revised Fee Split and Streaming Fee Increase

Governance Proposal
17

Hi everyone,

We at 1kx have elected to vote FOR the MVI Revised Fee Split and Streaming Fee Increase proposal. The reasons for this are as follows:

  1. We believe Index Coop should be working with external methodologists to be successful. Index Coop is at an inflection point in its growth where it must decide if it is a product DAO that develops products internally or if it is a distribution platform for externally developed methodologies. At 1kx we have witnessed that only platforms and networks can reach exponential growth, but we recognize that it is ultimately going to be a community-led decision. Whichever direction the Coop takes, it is important to work with external methodologists in the interim to be successful. Developing highly-overlapping competitive products while simultaneously hindering an external provider’s growth is not a good look for the Coop regardless of future direction.

  2. We believe that this is a fair proposal. We understand MVI went through a different incubation process than other IC products. It was internally created under the experimental community methodologist banner and later spun out once it was recognized that the community methodologist program did not create ideal incentives as discussed here. We view this experiment as a sunk cost and should now recognize Metaportal as a fully-fledged external methodologist no different than DeFi Pulse, Llama, ToD, Bankless, or any other. As such, it is important to treat these partners in a fair manner, with similar terms for similar products. This proposal is in line with the recent renegotiation of ToD for the DATA product, which is also a relatively simple sector-based index, so we do not believe the terms are controversial.

  3. Renegotiation is part of the business. It has been discussed whether we want to have a more robust process for modifying fee splits post-launch. We understand the concern here, but we recognize that at the end of the day the Coop will always be in control of voting in favor or against a proposed renegotiation. If a methodologist and IC launched a product without a clear PMF at first that later catches a strong narrative or becomes widely adopted, we would view this as a change in circumstance that would likely trigger a renegotiation. We aren’t against establishing a more robust framework for the renegotiation process, but we do not have one today and we view this as a standard business practice. Thus, we shouldn’t slow down a renegotiation today because of a process that the Coop hasn’t created yet - that feels too burdensome and bureaucratic to partners.

All-in-all, we want to make sure that the Index Coop succeeds. This will be highly dependent on how we treat external providers in the near-term to make sure they don’t feel discouraged working with the Coop and seek to launch their product elsewhere.

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