I would also add that I would feel much more comfortable if it were possible to trim the tier 1 list to like Coinbase, Binance, FTX and/or 2+ of the others.
I’m not sure I’d be stoked about some of the option outcomes for some of the others.
It may not even be Wintermute’s neglect that gets it a win. Let’s say the SEC files its lawsuit against Coinbase over Lend and continues loudly investigating Uniswap. Lend is a different product than Index, for sure. But, let’s say all these CeFi platforms suddenly get cold feet over listing anything that could be deemed a security and pause while that’s resolved. No CeFi listing, through no fault of Wintermute. But, if DeFi continues to press on (tough to get an injunction against a smart contract), then I could still see Index rising in value.
I would simply suggest that incentives would be better aligned if Wintermute did not get a potential reward for failure.
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Due to the extensive amount i want to weigh in. I like indexcoop and are just a DYOR guy presenting info.
Wintermute is no doubt a leggit MM that accelerates listing on tier1. More people, more holders, more fees, more buzz, sound good but not too fast and have a look onchain.
wintermute1 wallet: Ethereum Transaction Hash (Txhash) Details | Etherscan
SomniumSpace team transfered 5e6 USD to the MM on the 28.04.2021 and quickly after the price doubled from 2.5 to 5usd. On the 1. may the listing on gemini followed and the token gradually hovered down to 4usd the following month. To “market-make”, wintermute sent only 500k of a total 2e6 CUBE tokens (25%) to gemini (no interaction since), implying that the actual amount of tokens is significantly less. If the remaining 75% tokens are necessary to mm a pair on uniswap is questionable and therefore be considered a compensation for the listing/service amounting to 1.5e6 CUBE worth 3.75Musd at 2.5$ (a full retrace).
Takeaways:
- the amount was overstated for pure MM and the major cut can be considered a “listing fee”
- price spike after listing fully retraced (good, no shady mm pumping)
fig1.: price spike from 2.5 to 5 back to around 2.75$
The project spent 5e6usd for a MM on uniswap + gemini listing/mm which they probably would have gotten via organic growth by users regardless. In contrast the FLI product of indexcoop got market fit already, so i see INDEX in the three digits price range, but lets conservative take current price 43$
If index drops below 7.5e6 /1e5 = 75$ they would return 100k index, bearing 0 risk.
The MM will likely be able to list tier1 putting in a bottom at 50$ and using projected mcap growth to derisk holdings in three digits range, paying back the 5Musd loan. I anticipate a mcap growth of40e3 / 2e3 = 20x, putting index at 20*43 = 860 - unlocks ~ 500$ per coin. The 100k loan would amount to 50e6 of which they pay back 5e6 alias 10% gradually derisking the excess amount (not needed for MM).
Indexcoop should invite Wintermute but revise:
- restrict tier1 definition to binance/coinbase/(ftx)
- consider that primary audience is defi users whose weight is growing with maturing defi infra and thus either reduce the index amount or increase the loan payed by wintermute.
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While the IIP passed, I wanted to address some of the subsequent questions over the past few days:
Wintermute isn’t just pursuing a deal. They actually have one in place with PieDAO, for example. However, we feel far better positioned to be the beneficiary of the services given our place in the market, for what it’s worth.
Wintermute winning also isn’t the guaranteed scenario you are making it out to be. If the INDEX price is below $50, Wintermute works for free for us for a year. Now, I don’t think that’s likely. What I do think is likely is that Wintermute market-making helps the Cooperative get to higher INDEX prices by ensuring more liquid, deep markets for our products.
Ultimately, I fail to see how a price of $250 could possibly be considered a losing scenario for the Cooperative (or how you can conclude that that price would have nothing to do with Wintermute). I hope Wintermute gets at least that level. If they do, that means the entire community of token holders would share in the upside.
It’s in our control where we pursue a listing, so while we will honor this list, pursuing a given exchange will be because we decided to pursue that particular exchange. We can internally decide how to prioritize exchanges if we feel Coinbase (or even FTX) matters more.
If this scenario plays out for the broader IC product suite, the INDEX token itself would still be fair game for a listing, which would be huge for the token and this community.
As always, thank you for the feedback and the opportunity to clarity some of these nuances.
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Hey @Metfanmike @fallow8 , now that the IIP has passed, when exactly will the 100,000 INDEX be loaned out? Curious as to when Wintermute will actually begin market making for Index Coop.
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Next step is signing actual legal contract. Working on it!
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I am late to the party on this proposal but think its worth sharing a couple thoughts for your consideration.
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Can I suggest that if Wintermute elects to repay cash rather than Index tokens that it also agrees to a further lock up?
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In future, can we please run a competitive tender process for these types of deals? In my life I have never seen commitments of this size made without a competitive process being run. It is a SOP for any serious organisation. This would also alleviate many concerns from community members on pricing.
Thank you for your efforts on this.
This proposal has been executed. 100,000 INDEX has been transferred to Wintermute here:
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Just seeing this comment, so apologies for the delay. To avoid any confusion, we had three well-known market makers in the mix (including Wintermute) to be our official market maker. Wintermute’s proposal was (easily) the best.
Subsequent interactions with other market makers at recent conferences have only validated the decision to go with Wintermute. The market makers we met would have asked for more of the token supply and at a discount to spot, rather than at a premium.
We also communicated the competitive nature of this process in weekly standups and IBWG meetings in the weeks prior.
Does that help?
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