IIP-XY: INDEX Sale to Contributors

Governance Proposal
1

title: INDEX Sale to Contributors
status: Draft
author: Matthew Graham (@Matthew_Graham and :fire: Fire :fire: in discord)
created: 2021-06-07

Simple Summary

After completing the strategic sale portion of IIP-32, eligible Index Coop contributors have an opportunity to purchase INDEX tokens in line with the terms and conditions outlined in subsequent sections.

This sale is intended to allow Index Coop contributors to increase their ownership of the protocol on the same terms as those offered to strategic partners.

Abstract

Index Coop contributors during the months of January, February & March are able to purchase up to $100,000 USD worth of INDEX each. The unit price is $24.26 with a 180 day lock up followed by a 90 day vesting period.

Eligible contributors are to contact :fire: fire :fire: between 16th June 2021 to 30th June 2021 and advise the amount of INDEX they want to purchase.

Strategic partners were able to purchase INDEX tokens at $24.26, with a 12 month lock up period and 6 months vesting period. ie: Total vesting period is 18 months.

In line with IIP-32, the terms and conditions offered to contributors are better than those received by strategic investors and endorsed by the Treasury Committee.

Motivation

The motivation for divesting our treasury was outlined in IIP-32 and with the strategic sale completed we can publically share more the terms and conditions achieved. We will release the deal participants when we announce the deal formally in the coming weeks. All funds listed above received the same terms and conditions as specified below.

  • $24.26 per INDEX token
  • 41% discount to the 30 day moving average ending 7th May 2021
  • 12 month lock up period
  • 6 month linear vesting period

Eligible contributor terms are conditions:

  • Price: $24.26
  • Maximum Purchase: 100,000 USD
  • Lock Up Period: 180 days
  • Vesting Period: 90 days
  • Eligibility: January 2021, February 2021 & March 2021 Contributors (see spreadsheet below)
  • Sale Period: 0800hrs EST 16th June 2021 to 1700hrs EST 30th June 2021
  • Form of Payment: USDC
  • Discord Point of Contact: :fire: Fire :fire:

Specification

Index Coop Contributor’s Sale

Depending on the number of participants, the average check size, and the Ethereum gas environment, the Contributor Sale may use a different escrow process from the INDEX Strategic Sale. In the INDEX Strategic Sale, deployment of each escrow & vesting contract was approximately 1.7M gas per participant.

The Index Coop Contributor’s Sale will follow the below process:

  1. Treasury Committee will produce a list of all eligible contributors
    A wallet address they will use to trade USDC for INDEX

  2. Eligible contributors are to contact :fire: Fire :fire: and provide the following information
    The amount of INDEX they want to purchase
    The wallet address they will use to pay USDC & claim vested tokens.

  3. With a list of USDC commitments secured, the Index Coop engineering team will create an escrow process acceptable to Sale participants. If no alternatives can be found, the Sale will proceed in the same format as the INDEX Strategic Sale.

  4. At minimum, each successful INDEX Sale participant will be given a vesting contract with a 180 day cliff, 90 day linear vesting period.

  5. To claim vested tokens, the INDEX Sale participant must call “claim” on their assigned vesting contract.

For eligible contributors interested in the Index Coop Contributor’s Sale, we ask that you act with integrity (eg: not selling INDEX to then buy back, or passing USDC to another person to partake on your behalf … ) given the knowledge that this sale will take place, but we will of course not be policing what contributors decide to do with their tokens in terms of buying and selling.

Voting

FOR:

Perform an internal contributor raise in line with the T&Cs outline above.

AGAINST:

DO NOT perform an internal contributor raise in line with the T&Cs outline above.

Copyright

Copyright and related rights waived via CC0.

9 Likes
2

Thank you for this @Matthew_Graham (darn it :fire:Fire​:fire: is hard to type - and I feel pretty quick with emojis on desktop)

Ok, I have read this twice but may still have missed it, it’s close to bed time… Anyway, are the tokens covered by IIP41, that is: are they eligible for voting?

1 Like
3

Really like this proposal, but with INDEX currently trading at $24.19 this discount is actually a premium.

I think we need to rethink how we calculate the discount. Maybe by taking into account a larger timeframe for the average would help. We are currently using a 30 day moving average, which I feel is very small window for such a volatile asset.

4

Contributors are receiving the same deal our investors did, there were several points during the execution window when the discount became a premium as well. Yet they still had faith in the Coop and agreed to the terms with a long lockup.

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5

Investors also benefit from having no slippage on their large buys. Most contributors could actually buy their desired amount at the open market without dealing with those issues.

Why would someone voluntarily buy at a premium when the open market presents no downsides?

6

A few points to note here. We told participants in the strategic raise that contributors would be offered the same price and this is something we intend to honour. We however did elect to reduce the lock up and vesting durations. This is inline with IIP-32 which states contributors would be offered the same or bettered terms to the strategic raise.

The sale price was based upon data prior to 6th May. At the time, this was very lucrative. It is unfortunate market conditions have taken a turn for the worse and I would like to remind people, this is an opt in proposal.

6 Likes