Hey @bigsky7 thank you for the feedback provided in the message above.
Since there’s a lot to unpack, I’d like to start by going over a few metrics and data points regarding FLI products, before addressing your points:
- The FLI products current fee structure includes streaming fees and mint/redeem fees. These fees are split 60% to the Index Coop and 40% to DeFi Pulse.
Unique value proposition:
- FLI products are unique in the space since they are the only onchain leveraged product that is transferable.
Revenue: (Source: @jdcook’s dashboard)
- FLI products revenue account for over 50% of the coop’s daily revenue .
- FLI products aggregate revenue for the past three months is over 350,000$
I’d also like to highlight that the outstanding growth, and revenue of hundreds of thousands of dollars generated by the FLI products has happened organically, i.e.,with ZERO liquidity mining incentives from the coop.
Now let’s address the points you made in your message above:
1. The FLI-pod of subject matter experts working full time on maintaining FLI assets
This is super exciting. It’s made me very happy to see so much enthusiasm from the Leverage pod and I value the content they’ve been producing. It really shows that the Coop is thinking long term and, having the DAO as a partner for these assets, is the right way to go.
It is crucial to note that these are diminishing costs, meaning that, with every additional FLI product launched, the associated costs will not scale linearly.
I understand your point and realize that this set of experts could be driving a high cost to the coop today. But I do not doubt that, over time, the cost margin will diminish dramatically as more FLI products are launched and managed by the pod.
2. Rebalancing and maintenance gas costs
All the rebalancing and maintenance costs are paid for by Set, as far as I understand. Their engineering team has been excellent at building these contracts and has demonstrated resilience even through recent challenging market conditions. FLI products are thriving.
I’m personally very happy that Set has a significant stake in the coop and is well incentivized to keep doing outstanding work in the future.
To wrap up, I’d like to point out that, so far, more than 95% of the Index Coop’s revenues have been driven by Pulse.inc. We’re committed to continue the same path and help the coop maintain its market leadership in the space.
Considering the extended context, we believe that a 40% split for Pulse.inc for this product is appropriate to maintain the right incentives for the coop to continue its sustained growth.
Happy to elaborate further on any of the points above!