Before I comment on any details, I will just emphasize that if the Index Cooperative does not believe the proposed incentive structure is fair and reasonable to both Index Cooperative and Titans of Data, we are absolutely open to negotiating a different structure. We certainly do not want the compensation structure to get in the way of a DG1 vote and further development of the index!
Now, onto the specifics!
This is close, but not quite correct. If the product reached $100m in TVL, it would unlock a total of 2% of INDEX as the product grew to $100m in TVL at $5m AUM (0.1%), $10m AUM (0.2%), $20m AUM (0.2%), $50m (0.5%), and $100m (1.0%).
Titans of Data believes this structure incentivizes us to maintain and develop the index over the long-term. INDEX rewards are only unlocked by reaching higher levels of AUM while still allowing the Index Cooperative to keep the majority of the long-term value creation.
Yes, Titans of Data will only receive 0.1% of INDEX supply (10,000 INDEX) for reaching $5m in AUM. For context, MVI has been 1.6% of the Index Coop’s revenue over the past 3 months (currently ~$5.5m AUM), so if it were part of the Methodologist Program it would be earning about ~670 INDEX per month, meaning that if it had gone live on the first day of the Methodologist Program, and retained its revenue share relative to other products, it would earn ~12,000 INDEX total.
Titans of Data is not participating in the Community Methodologist Program so @Kiba and I will not earn the $5k + 0.15%/INDEX over 2 years.
If we went the Community Methodologist route, and DATA failed to surpass $5m in AUM, Kiba and I would collectively make $240k and 30,000 INDEX ($690k at $23/INDEX) without providing any long-term value to the Coop. Under our proposed structure, if DATA fails to surpass $5m in AUM, we get 0 INDEX. If DATA surpasses $5m AUM, but fails to reach $10m AUM, Titans of Data only receives 10,000 INDEX.
We believe our proposed structure is significantly less financially risky for the Index Cooperative than the Community Methodologist Program.
As External Methodologists, we are assuming a far greater degree of risk than Community Methodologists, and therefore we believe we should share in greater upside than the Community Methodologist Program provides.