MVI is designed to capture the potential upside of the new but growing group of projects on Ethereum that relate to virtual ownership through NFTs, gaming, virtual reality and entertainment.
This will be the first index product to be launched from within the Coop community and not with an external partner as the methodologist.
Business Analysis Team
Marketing Benefit
Score: Medium
Traditionally, if we were launching an index like the MVI with a partner, we would assign it a “high” marketing score. The product is tapping into the current zeitgeist within the Ethereum and broader community which will prove to be incredibly beneficial. On the other hand, however, by being a community launched index, we lose out on the marketing benefits of having an invested, external party with its own brand to leverage.
For that reason, the MVI is rated Medium for this category.
Market Size
Score: High
Outside of DeFi, NFTs and the ownership economy is the only really other subsector to emerge and gain traction in crypto. Interestingly enough, NFTs especially have been able to break the traditional crypto bubble and be able to attract a giant mainstream audience. We expect this is just the beginning and the market will continue to expand from there which provides the next big industry tracking index opportunity after DPI.
Methodologist Capacity
Score: Low
As this is a community launched index by individuals, the primary methodologist capacity to judge here is the methodologist’s ability to continuously improve the product. We expect most marketing, business development, and growth to be primarily driven by the Coop.
Improving the methodology is still important however, and part of the reason we are going with a community methodologist is because there was literally no one externally available, knowledgeable, and willing to work on such a product. We expect deep expertise here to be incredibly valuable in the long run.
Unique
Score: High
Currently, there is no other established product in the market that is aiming to track the NFT and ownership economy market. This has become our most requested product primarily because of the lack of other potential customer options. Unlike DPI, which was not the first mover in tracking the DeFi industry.
Fees Generated
Score: High
At 0.95 basis points, we expect the fee generation opportunity here to be the same as DPI. We can expect such an index to grow large from the market it is tracking and charge a premium on fees because of no other options existing and the knowledge base needed to even attempt to create a product here. Furthermore, all fees generated are being given to the Coop.
Product Development Team
Risk
Score: Low
As a vanilla index like the DPI and CGI, launching such a product presents no risk.
Difficulty
Score: Low
Infrastructure to build out normal index products are well developed and require no extra work. Launching this product will require minimal efforts on the engineering front. We expect most difficulty to come from rebalance operations.
Recommendation
Through the reasons outlined above, the Work Teams recommend voting YES. The MVI is the most requested product we’ve seen. It represents a sophisticated tracking of one of the fastest growing industries in crypto today. We are really excited to get this product launched and reaffirm Index Coop’s position as the dominant provider of indices in crypto.
You can look at the rubric and grading here: Product Prioritization Chart - Google Sheets