Hey @m0xt - thank you for the constructive comments! I’ll try and address the points that @PaulFrambot and @twoodward haven’t covered.
This is a timely topic, especially considering the volatility over the past week. It’s an excellent question though and there are certainly many ways to “cut the cake”. One alternative would be to use a simple market cap weighting, but that would lead to a large allocation in USDT that doesn’t necessarily reflect the stablecoin composition across lending markets today. A TVL-driven approach that measures stablecoin allocation across the top DeFi lending protocols would lead to the largest allocation in USDC (which has its issues) and the second largest allocation in DAI (which is largely backed by USDC). There are other permutations that we considered, but rather than over-complicating the stablecoin allocation, we settled on an equal distribution for the stablecoins that met the inclusion criteria. Though some stablecoins are riskier than others, the returns across lending protocols tend to track accordingly.
Strategies inside of $MMI will certainly be monitored, and a public Dune dashboard will be built as well with the most meaningful metrics for tracking and transparency!
It is worth noting that $MMI will not be an actively managed product - the methodology and rebalancing parameters voted on by $INDEX token holders determine how the product will function. Any material alterations to the methodology or rebalancing process must be proposed by the Internal Methodologist Committee (IMC).
In the event of a time-sensitive situation, the IMC will publicly communicate any changes (here on the forum as well as across social channels) and propose a course of action. Via the optimistic governance model, $INDEX holders can object to any proposed changes before action is taken; otherwise, the proposal will be enacted in an effort to protect $MMI token holders.
Thank you again for the feedback - we truly appreciate it!