IIP-32: Index Sale

iip: 32
title: Index Sale #1
status: Proposed
author: Matthew Graham (@Matthew_Graham), Simon Judd (@bigsky7)
created: 2021-04-13

Simple Summary

This proposal seeks to increase Index Coop Treasury diversification by selling INDEX tokens for ETH or stablecoins. The INDEX Sale will be conducted in two phases: first a sale to strategic partners, then a sale to Index Coop community members.


To diversify the Index Coop Treasury, INDEX will be sold for ETH or stablecoins. The INDEX Sale will be conducted in two phases:

In phase 1, the BD team led by @reganbozman and @bigsky7 will sell up to 10,000,000 USD worth of INDEX to strategic partners for ETH and/or stablecoins. The exact terms of this sale will depend on the BD team’s negotiations.

After the strategic sale, Index Coop Gold, Silver & Bronze owls from January, February, and March will be allowed to purchase up to 100,000 USD worth of INDEX each. The terms of this community sale will be the same as the INDEX strategic sale or better. This community sale will be led by @matthew_graham and the Treasury Committee.

The INDEX strategic and community sales will both have at minimum a lockup period of 6 months vesting linearly. The final terms of the sale will depend on the BD team’s negotiations. With an INDEX price of 30 USD we expect this INDEX sale to diversify 20% to 30% of the Index Coop’s treasury into ETH and/or stablecoins.


Currently, the Index Coop Community Treasury is composed almost entirely of INDEX tokens. This is because the community treasury automatically vests INDEX tokens linearly on a block by block basis. Besides INDEX tokens, the community treasury also holds small amounts of DPI and ETH-FLI tokens accrued from those products’ streaming fees.

If the price of INDEX depreciates significantly the Index Coop’s ability to pay Index Coop contributors for ongoing BD, growth, and engineering efforts may be severely impacted. Significant diversification will help preserve the value of the treasury and ensure Index Coop operations can continue in the event of a bear market.

Furthermore, INDEX currently suffers from low liquidity. It is not uncommon for INDEX to experience +10% price swings in a single day. Some of the funds raised from this INDEX sale may be used to increase INDEX liquidity by providing liquidity to a Sushiswap or Balancer INDEX/ETH pool.


Strategic Partner Sale

  1. The BD team is nominally allocated 300,000 INDEX tokens to sell for ETH and/or stablecoins (USDC or DAI).

  2. The BD team does outreach to partners & conducts the INDEX sale.

  3. Once the sale participants and terms are finalized the BD team produces a list of strategic partners containing:

    • A wallet address the sale participant will use to trade ETH/USDC/DAI for INDEX
    • The amount of INDEX they want to purchase
    • The amount of ETH/USDC/DAI they will trade for INDEX
  4. The Index Coop engineering team will deploy an escrow contract (similar to BadgerDAO) for each sale participant.

    • The escrow contract will be funded with the desired INDEX sale quantity via the Index Coop Community Treasury directly.
  5. To claim the INDEX the strategic partner must deposit the agreed upon quantity of ETH/USDC/DAI into the escrow contract.

  6. After depositing funds, the Index Coop or sale participant may execute the swap.

    • This will transfer the deposited ETH/USDC/DAI directly to the Index Coop Community Treasury, and send the deposited INDEX to a vesting contract under control of the sale participant.

Index Coop Contributor’s Sale

The Index Coop Contributor’s Sale follows much of the same format:

  1. After the strategic partner sale has been completed the Index Coop Treasury Committee will conduct the Index Coop Contributor’s sale.

  2. The most favorable terms from the strategic partner sale (as determined by @matthew_graham and the Treasury Committee) will be offered to all Index Coop Golden, Silver, and Bronze Owl Contributors from the months of January, February, and March.

  3. The Treasury Committee will produce a list of all eligible and interested Index Coop contributors containing:

    • A wallet address they will use to trade ETH/USDC/DAI for INDEX
    • The amount of INDEX they want to purchase
    • The amount of ETH/USDC/DAI they will trade for INDEX
  4. The Index Coop engineering team will deploy an escrow contract for each sale participant.

    • The escrow contract will be funded with the desired INDEX sale quantity via the Index Coop Community Treasury directly.
  5. To claim the INDEX the Coop contributor must deposit the agreed upon quantity of ETH/USDC/DAI into the escrow contract.

  6. After depositing funds, the Index Coop or Coop contributor may execute the swap.

    • This will transfer the deposited ETH/USDC/DAI directly to the Index Coop Community Treasury, and send the deposited INDEX to a vesting contract under the control of the sale participant.

For eligible contributors interested in the Index Coop Contributor’s Sale, we ask that you do not sell your existing INDEX tokens leading up to and during the INDEX Sale. This sale is intended to allow Index Coop contributors to increase their ownership of the protocol on the same terms as those offered to strategic partners.


Copyright and related rights waived via CC0.


I understand the need/desire to diversify the treasury but i do worry ab the conflict of interest in the sale being offered to investors then being offered to contributors. Theres an clear incentive to offer a sweet heart deal to investors because those approving the sale will presumably be offered the same price.

Surely there is a way to make this more egalitarian. Already concerns of centralization have been raised and this feels like it will just make those more valid.

Additionally it feels like the coop is on the verge of a break out w the imminent launch of additional FLI coins and i assume their inverses soon to follow which will be self sufficient and not require LP incentives. Surely we could sell at higher prices after these launches and increased cash flow.

Obviously the liquidity is a huge problem that needs to be solved but i dont see how this makes any steps towards alleviating this problem in the near term


My understanding of how this works is the sale terms will be offered to investors based on 1) comparable sales by other protocols (Badger, etc) and 2) negotiations by the BD team. The sale terms will then be extended to all Gold, Silver and Bronze owls which is basically everyone in the community who has contributed to building Index Coop. How would you make this more egalitarian? Literally every contributor has an opportunity to participate on the same or better terms.

Concerns over centralisation come from community not owning much of the voting power. This sale would actually partially address this. Bringing in other token holders, that are not currently involved, will also diversify the token holder structure.

I would argue that the goal of Treasury management is not timing the market. We all know that crypto markets are often irrational. We can bring as many awesome products to market as we want, but if the broader market sells off, INDEX will sell-off with it. We should proceed with diversifying the Treasury as planned, with INDEX price being a secondary consideration.


This is totally valid feedback.

In terms of waiting for a higher price - I think trying to time the market is really hard. I am also long $INDEX but have no illusions that we can time the market. Right now the treasury is ~99% INDEX which is very risky.

I’ve talked to a bunch of community members about ways to make this fair, and I think this is the best mechanic. It’s not perfect, and it’s somewhat opaque - but ultimately almost the entire community will get the same terms as investors.


I think this is a good idea. This (1) builds strategic partnerships with the institutions BD is able to connect with and (2) further allows contributors to build skin in the game w/r/t Index Coop’s growth, all while (3) diversifying our treasury.

This last part is key to ensure that Index Coop can survive another crypto winter and retain top talent.

On timing, I don’t think an existential point like diversifying our treasury is worth trying to time a slightly higher INDEX price.

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I guess my main qualm is that we would be doing otc sales to insiders while the liquidity for Index is essentially nil.

Generally the private sales of ‘decentralized’ protocols makes me uneasy even if im included in them. It all feels very walled off from the public. Im all for the private sales w strategic partners yada yada but I think we would be well served to first have a publicly accessible road map showing the vision of the coop and how Index fits into that plan, and then if need be incentivize an index LP so that anyone can get exposure to index, not just twitter personalities, advisors and discord members.

@Matthew_Graham @BigSky7

(full disclosure: I am eligible for the Index Coop contributor sale as I was Gold/Silver Owl during January/Feburary 2021)

I am in 100% in support of the spirit of both the Strategic Partner Sale and Index Coop Contributor Sale as I strongly support Treasury diversification, but do have some detail questions:

  1. Can you clarify when BD partners / Index contributors would have full ownership rights to all of their INDEX tokens? Would it be 6 months after the sale?

  2. What discount to the market price is the Business Development (BD) team planning to offer to Strategic Partners and Index Contributors? How will this be determined? Will it vary based on negotiations with potential partners?

  3. What kinds of strategic partners in the BD team targeting? What makes a Strategic Partner eligible for the sale?


I support this IIP. We need to diversify the treasury to protect it from the bear market. Also, we want to sell the tokens to partner/contributors with strong hands.

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One question I haven’t seen mentioned yet, will the purchased INDEX (for both partners and community) be eligible for voting during the vesting period?

Current example - INDEX earned from liquidity mining but not yet claimed can be used to vote


I think as currently specced, it will not be eligible for voting. That would require updates to the Index Coop snapshot strategy

Thanks for these questions @Thomas_Hepner

Community members will have full access to their Index tokens at the expiry of the vesting period. We are discussion a range of vesting periods (6-18 months) with BD partners.

We are looking closely at comparable raises done by other Tier-1 protocols and the discounts that were offered. These range from 15%-40% off spot. This will vary based on negations with potential partners. Our intent is to a) get the best possible deal for the Index Community b) bring on value add partners.

We are targeting top tier VC funds based on three criteria - 1) Brand name (for institutional credibility) 2) Have large Tradfi LPs 3) Funds that will be a value add and productive for our community to work with


@BigSky7 Thank you for the details - very excited to see which top tier VC funds want to partner with Index Coop!

Hi All,

Based on the feedback above and our desire to move quickly on this - We intend on having the snapshot vote early next week, most likely starting Monday.

Thank you for all the feedback and questions so far :slight_smile:


This is not finalized so take this with a grain of salt, but I believe we will net out in the ballpark of a 25-45% discount to 30 day trailing avg price, with a 12-18 month lockup


Hi All,

To be fully transparent, IIP-32 states to sell up to $10M of INDEX and also states a nominal 300,000. With a sale price of $24.26, we sold 315,281 INDEX for 7,775,000 USDC.

This exceeds the original 300,000 INDEX request but has undersold the $10M target.

All the applicable transactions can be found here.

I believe the intention is to continue selling INDEX up until the $10M value, which is another 91,714 INDEX tokens.

The purpose of this post is to provide absolute transparency with the broader community as information comes to hand.


Thanks @Matthew_Graham, I assume that the sale price of $24.26 would be held for future sales (so unlikely under current market conditions).

Is it worth setting a reminder to update this at a future time (End of July)?

Hi @overanalyser

We would need @BigSky7 to advise the future course of OTC sales. I believe the leaders have been discussing this with Set Labs.

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@Matthew_Graham thanks for highlighting this. We plan to officially announce the deal on official channels on Tuesday (6/29). For community context:

  • Sale price: $24.26 ( all investors received the same terms)
  • Terms: 18-month total lock-up. 12-month lock, 6-month linear vest.

I will do a longer write-up early next week to detail the full deal time-line and highlight lessons learned. One thing to note was the significant volatility throughout the course of the raise. @reganbozman and myself made the call in late May to add 10% additional Index (effectively lowering the price from $26.68 to $24.26) for each investor. This was an extremely stressful time during the deal and without this tactical call it is likely we would not have completed the full raise. This accounts for us going slightly over the total Index allocation ( highlighting for community vis/ some background)

Major investors in the sale were : 1kx, Galaxy Digital, 1confirmation, Defiance Capital, Assembly Capital, LD Capital, Wintermute, Laconia Ventures

As the first truly community led raise in DeFi this was a major milestone for our community and highlights our ability to execute major initiatives.


Is there an analysis that takes into account the potential ETH raise via Balancer LP? Also, given that spot is below the sale price is there any updated plan for the contributor sale (seems to be a moot effort, so just curious)? What I’m getting at - there seem to be parallel efforts to diversify the treasury, so looking for a resource that pulls those all together and shows where we’re at vs where we’re trying to go.

Hi @mel.eth,

Very unfortunate timing with this contributor raise. It was hard to gauge what level of community involvement there would be with this proposal and to date, no one has been in touch about the offer. From a treasury diversification perspective, this proposal was always upside.

The Balancer Private Pool was envisage to raise $5M of ETH by selling INDEX. We were open to executing the Balancer Private Pool twice over a 6 month period which would have been $10M. It would have been nice to have somewhere between $15M-$20M in non INDEX assets around years end. This was never a firm target or committed to goal, it still feels like a really safe amount to have. We mention the ability to sustain Index Coop entire from income generated by the treasury in the our treasury diversification post here.

As a community, our forecasting and forward planning is not yet at a point where we can say exactly what we need. Our cost base is heavily influence by Liquidity Mining and to a lesser extent rebalancing costs which Set Labs is currently paying on Index Coop’s behalf.

At this point in time, it feels like a stretch to attaint $15M-$20M, but if market conditions change, then we will revisit the Balancer option. When the market is buoyant, daily trading volume appears to be a lot higher.