IIP-175: Launch the Money Market Index ($MMI)

This Proposal is now live on Snapshot

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Hi @LONGnostradamus

You can see the results of the 1y backtest here

and get stuck into the numbers here

We would not include CBDC’s into our decentralised products.


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Look good so far. Thanks so much:)

Just wanted to say that I love @nathan.allman jumping in here and would like to see Flux seriously considered (or at least see more expansive feedback on the exclusion, could totally understand wanting to see more operating history).

One challenge for a product like MMI is that DeFi lending rates are now below US treasuries. That hasn’t always (and will not always) be the case, but an anchor to those rates would be extremely useful for a basket like this. Again, especially given the current rate environment.


Hey @nathan.allman this is Interesting, this seems more in line with our Real World Assets index - $REAL. Will reach out via Twitter :slight_smile:


I really like the idea.

My only concern is the protocol concentration risk.

Deploying a total of 66.7% through Morpho for example and nothing through other well-established protocols such as AAVE and Compound, results in a very concentrated smart contract risk.

Wouldn’t a cap on single protocol exposure or a TVL-based allocation be more appropriate in this context?

Would be really interested in your thoughts here!

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Hey @hansolo thanks for the question. This is something we deliberated over for some time. Without Morpho the product would have a materially lower yield. Having Morpho, Aava and Compound to spread the smart contract risk would mean significantly increasing the cost to flashmint/redeem for users making the product economically unfeasible. Therefore on balance it was decided to make a more economically compelling product.

Morpho recently underwent a review from DefiSafety.com and were awarded with the highest score ever for a defi protocol.


Thanks @MrMadila. This was really helpful!


Product Update

Further analysis has identified several improvement opportunities for the Money Market Index.

1. Naming Convention

In an effort to establish consistent branding across Index Coop products, the token symbol for the Money Market Index will be updated to “icMM”. This naming convention will be extended to other Index Protocol-based products launched by the DAO in the future.

2. Composition

Upon deployment and testing, issuance and redemption costs were significantly higher than expected for the above composition. A contributing factor was the higher cost to deposit to Morpho-Compound positions relative to Morpho-Aave positions. Additional rate analysis also revealed materially higher matching efficiency for Morpho-Aave deposits than Morpho-Compound deposits and, therefore, higher realized yield for lenders over time. As a result, Morpho-Compound USDC and Morpho-Compound DAI will be replaced by Morpho-Aave USDC and Morpho-Aave DAI in accordance with the methodology. This will also lower gas costs associated with issuance and redemption and lead to a more competitive, sustainable source of yield for token holders over time.

Based on this updated composition and 180 days of historical interest rate data, $icMM would have a Gross APY of 2.84% . An overall Net APY between 2-4% should still be expected over time.

This recomposition will also improve protocol exposure and Value-at-Risk (VaR) for $icMM. Overall exposure to Compound v2 (via Morpho-Compound and Notional) will be reduced and exposure to Aave v2 (via Morpho-Aave) will be increased. An updated Protocol Exposure table is provided below that reflects maximum exposure to primary and underlying protocols; please note that it is more conservative than the previous Protocol Exposure table.

Screenshot 2023-04-12 at 4.16.35 PM

3. Distribution

Due to high issuance and redemption costs, the Index Coop will not be deploying POL for $icMM at initial launch. Flash minting and redeeming will be supported through the Index Coop App for large purchases, and additional development is underway to lower access costs for small-to-medium-sized purchases over time.


Great proposal. This is exciting, look forward to watching it launch and hope for it to succeed. Even if the tech is amazing, how will this get marketed? I’m a frustrated holder who doesn’t see much traction / branding / marketing.

The Money Market Index ($icSMMT) officially launched on May 11, 2023 :partying_face:! Relevant resources below:


Introducing the Money Market Index Article: Introducing the Money Market Index ($icSMMT)
FAQ Article: Money Market Index FAQ
Fact Sheet: Coming soon
Dune Dashboard: https://dune.com/index_coop/money-market-index


IC website: Money Market Index
IC app: Index App | Buy & Sell Our Tokens
Token Contract: Index Protocol: icSMMT Token | Address 0xc30fba978743a43e736fc32fbeed364b8a2039cd | Etherscan