IIP-102 Launch the Bankless DeFi Growth Index ($GMI)

Could not be more excited about this. Indexes like this that help people passively capture value from new and emerging defi products feels like a massive win.

Love the concept of potentially making assets like OHM productive by staking and delivering those returns to back to holders of the asset. Could even be an interesting potential approach to deliver that value back to metagovernance delegates for effectively managing the risk of these assets (though I know paying delegates is a much more complex conversation, but this feels like an avenue that could be incentive aligned).

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Would definitely buy this. Its has a lot of Defi 2.0 protocols. These are growing really fast in terms of TVL and so there is a time-to-market element in order to capture the growth phase.

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Please explain the 2% fee

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Excited to see this launched. Believe active mgmt to justify fees required. Being able to diversify the rug pull risk across a portfolio of these makes total sense. I’m in about 1/3 now and was eying others so this provides a great one stop shop. Somewhere between monthly and quarterly rebalancing needed IMHO.

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Gas costs to maintain and rebalance a portfolio like this would likely cost a bit more than $26/month

An index product can socialise such costs and typically pass on the savings to all users.

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In addition to gas efficiency, it’s also worth mentioning the tax efficiency of a single token you can HODL that will rebalance for you to track a fast-moving sector.

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FLX is the lowest weighted on on the list. TracerDAO meets the requirements also. It also should rank higher than FLX and kick it off the list.

FLX market cap 55m
TCR market cap 75m :green_circle:

FLX diluted market cap 383m
TCR diluted market cap 586m :green_circle:

FLX volume 381m
TCR volume 583m :green_circle:

FLX circulating 14%
TCR circulating 13% :red_circle: ?

“promising early stage DeFi projects which are not yet considered blue chip” – This is how Ryan Sean Adams would describe Tracer and is a big supporter of TracerDAO.

60% Square Root Market Capitalization
30% Liquidity Score
10% Dilution Score (is less circulating better or worse? The proposal doesnt make it clear)
(15% single token cap) (not sure what this means)

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@LemonadeAlpha - based on this can we consider adding TCR to the index? Their inclusion in the Tokemak reactor is a signal as well.

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@LemonadeAlpha - Any plans to change it to sOHM as OHM does not earn interest?

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Community call scheduled for 2nd November 2021, 12:00 PST // 19:00 UTC.

You can find details about the community call on our shared calendar: Meeting Calendar - Join us! - Index Coop Community Handbook

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would be careful using wsOHM or sOHM as productive assets introduce concerns regarding the security status of the INDEX.

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@0xdouglas beat me to it, but wsOHM, or any other productive asset could risk classifying this index as a security, and would personally advocate against it.

Would love to see the full inclusion criteria as it feels there are some tokens that should be included (TCR, FXS etc) per the above criteria. If additional screens are being applied would love to have some acknowledgment of them.

Lastly, would love to know if there is a screen for security (audit done) and security status (no authorities have deemed the token a security).

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Want to first say I’m a big fan of this product, and great job polishing the details of this forum post!

What happens if methodologists want to make changes to token criteria like these after launch?

Personally I think methodologists should have the ability to make changes in reaction to market conditions or user feedback. I’d also want to make that ability transparent, and any changes well-communicated.

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This is a super important question because OHM without staking is a questionable asset at best. APY from staking is currently 8,191%. The math isn’t in our favor.

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Definitely digging the small cap/growth DeFi theme here and agree it would complement DPI quite nicely.

I quickly browsed through the list and the majority of them are on L1 only. Would we expect that most of the upcoming DeFi project continue to be launch on L1 and hence a L2 is not a feasible option?

Personally my only hesitation would be the gas costs on L1. If I were to allocate $1,000 or $2,000 at the gas cost of 0.025 ETH / $110. Not a deal break but it does sting.

Going along with the allocation of 4:1 / DPI:GM which seems reasonable to me, I tried to find the median holder’s value of DPI but couldn’t find it. Cringe to use averages but… the average value per a holder is about $13,500 ($202,684,819 / 14982 holders). At the 4:1 ratio, this average holder would allocate $2,700 to GMI so I guess the gas cost would be acceptable here.

Please let me know if any assumption/calculation are incorrect, I’m still fairly new here ^^;

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As Michael mentioned, there is a community call today, we will look to answer any questions posed here regarding asset selection and inclusion of productive assets.

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Hi @Mringz , with the community call completed, can we please get an IIP number and schedule DG1 snapshot for next Monday.

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I like it a lot. Would by a bunch today

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Excited about this launch! Curious, how often will new tokens be added into/out of the product? And how often rebalances will keep all existing tokens?

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I have queued up IIP-102 Launch the Bankless DeFi Growth Index vote to begin on Monday, 11/8.

https://snapshot.org/#/index-coop.eth/proposal/0xf7bf46dc0009184e394704585daace8f1dd43b62cb64b60aea712d00f58edddd

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