I do not think this is the correct way of thinking about investing in product development and expansion. If it were, we never have launched DPI as it is currently costing the Coop $9m/year just in liquidity mining rewards - I definitely do not agree with this conclusion!
Index Cooperative is a startup in rapid growth mode. If we launch a product that reaches $100m in AUM that is a strong sign of product market fit, and that AUM will grow much higher over time, and generate far higher revenues for the Coop.
Streaming fees are a form of subscription revenue. Software-as-a-service companies (SaaS) based on subscription models at our stage of development conservatively are valued by markets at 25x+ multiple of revenue. Extrapolating Index Coop’s June 2021 revenue, we are annualizing ~$2.3m in revenue, so INDEX is trading at ~23x revenue (using circulating supply) and ~117x revenue (using FDV).
At $100m in AUM and 70% of the streaming fee, the Index Cooperative would have a product generating $665k of annual revenue. Using INDEX current revenue multipliers, that would be adding ~$15m in circulating market cap or $79m to FDV.
As an INDEX holder, if the Index Coop had a different opportunity to pay 200,000 INDEX (~$4.6m at $23/INDEX) to grow FDV market cap by ~$79m (~30% of current FDV), I’d vote for it without hesitation.