IIP-XYZ - Liquidity POD budget request to 31Mar21

[overanalyser]

IIP Number: XYZ

Title: Liquidity POD budget to 31st March 2021

Status: Draft proposal

Author(s): @overAnalyser

Created: 11th December 2021

‌

Simple Summary

‌To give the newly formed Liquidity pod a mandate to direct the management of INDEXcoop capital resources and limited expenditure to support DEX liquidity.

The pod will have the authority to direct [USD TBC] of INDEXcoop capital and a further [USD TBC] of expenditure.

Abstract

‌With the passing of IIP-110, liquidity pod members are being recruited and structures put in place.

The pod will have the authority to manage all capital currently deployed, or planned to be used for in providing liquidity of $INDEX or our products. In addition, the pod will be able to manage liquidity to support product rebalances and to pay liquidity incentives to 3rd parties.

This IIP is purely focused on the pod budget. It does NOT define the exact mandate, RAPID framework, or OKR’s. These will all be decided by the Liquidity pod and Wise Owl council.

Motivation

‌

Managing the DEX liquidity of $INDEX and our products is a key part of our operations. If done correctly it greatly improves the user experience in buying and holding our tokens.

To date, liquidity has been managed by a combination of expenditure (liquidity mining) and direct provision of liquidity. These have mainly been agreed upon by individual IIP’s resulting in significant governance overhead.

In addition, we have had occasions where plans approved by IIP process become non-favorable to implement due to technical blockers or better alternatives becoming apparent.

Useful short term capital initiatives (e.g. seed liquidity for product launch, or underlying liquidity to support rebalancing) have largely been discounted due to the governance overhead for individual IIP’s.

Reliance on the IIP process is not fit for current requirements and will struggle to scale as we launch more products.

Current (and planned) Capital deployed

Product	Type	Value	Link
BED:ETH	Long term (>90 Day)	$260,000	NFT
ETH2-FLI:ETH (polygon)	Seed (< 7 day)	$250,000	Address, LP holders
INDEX:ETH	Long term (> 90 day)	[$1,400,000] - not yet deployed	IIP-109

Proposed & agreed but not deployed expenditure

Product	Type	Value	Link
DPI:ETH polygon	Polygon LM rewards (not deployed)	$20,000	IIP-62
MVI:ETH	Liquidity migration incentive(not deployed)	$48,000	IIP-96
MVI:ETH	Liquidity migration incentive (Gas and LM rewards)	$76,000	Draft IIP-XY

‌By creating a Liquidity pod, with the use of a RAPID decision-making framework we allow a well-informed group to act quickly on behalf of INDEXcoop as we grow.

To be effective, this POD needs access to assets without a need for individual IIP’s.

Specification

Overview

‌The Liquidity pod will be given authority to allocate INDEXcoop capital and expenditure to the specified limits to support product rebalances, and the DEX liquidity of our products and $INDEX.

Rationale

‌‌By creating a Liquidity pod, and the use of a RAPID decision-making framework we allow a well-informed group to act quickly on behalf of INDEXcoop as we grow the number of products on the market.‌

Allocating a budget for the POD to use is an essential part of the benefit of creating the liquidity POD.

Technical Specification

1. The liquidity pod will take over responsibility for all current, and agreed on liquidity deployments and any proposed or agreed expenditure that has not been put on chain:

2. Future Decisions to allocate INDEXcoop capital or expenditure will be done via a RAPID framework by members of the liquidity pod, F.Nest, G.Nest, with support from appropriate community members and oversight by the wise owl council.

3. Liquidity pod directions will be enacted by the engineering team and/or appropriate multi-sig signers.

4. Decisions related to financial assets will be communicated via a Liquidity pod announcement channel on the discord.

5. Wise Owl Council can disband the pod at any time.

Voting

For

To delegate authority over [TBC] $ USD of INDEX coop assets and to make available a further [TBC} USD of expenditure to the liquidity pod until the 31st March 2021.

Against

Individual recommendations for the liquidity Pod will be submitted for IIP votes.

‌‌

Copyright

‌
Copyright and related rights waived via CC0.

[overanalyser]

Please note, the exact budget request values are currently being agreed upon within a dedicated RAPID. This will be going to the Wise Owl council for agreement.

Once agreed, I will update the proposal and include a link to the RAPID doc.

If you are a Liquidity pod member or Wise owl, please see the RAPID document linked in the pod discord channel.

I prefer to work this way as it means the POD and wise owls can reach a consensus before the IIP is presented for vote.

Unfortunately, my desire to get a snapshot vote live w/c 13th Dec has overlapped with delays in finalising the RAPID…

[Matthew_Graham]

Hi @overanalyser,

I am a bit concerned by this post and the lack of details. I have a series of questions here:

• Gelato Uniswap V3 DPI : ETH G-Uni pool has already been agreed with the Gelato team and was to be presented on the forum in the coming days. To this end a G-Uni Pool has already been created and 3 wise owls were apart of this decision. May I suggest capturing this in the post. The intention was to implement something very similar to the MVI : ETH proposal and there is already progress being made towards updating Index Coop’s website to reflect this.

• Regarding the budget, I am not sure a rapid is the sole tool here. Think of the request for funding as presenting a business case to the community. The rational to define a mult-million dollar request will need review and input beyond the Liquidity Pod much like how a Nest Requests funding. I suspect OKRs etc, will need to be thought through and detailed to attain said budget.

• My expectations and those of @Finance is this liquidity pod will act within guidelines similar to how the Finance Nest manages its stable coin allocations. I don’t see a scenario where the community assigns a sum of money into the control of a select few without said guidelines.

I also expect these guidelines to be the means by which the community can hold this pod accountable for their actions. By publishing the guidelines on the forum it will help build trust and enable others to comment which is important as we operate within a DAO construct.

[overanalyser]

Hi @Matthew_Graham

ok, to address your comments in turn:

@Matthew_Graham

Gelato Uniswap V3 DPI : ETH G-Uni pool has already been agreed with the Gelato team and was to be presented on the forum in the coming days. To this end a G-Uni Pool has already been created and 3 wise owls were apart of this decision. May I suggest capturing this in the post. The intention was to implement something very similar to the MVI : ETH proposal and there is already progress being made towards updating Index Coop’s website to reflect this.

The intention in setting up the Pod is to allow management to be delegated from INDEX holders (IIP) and the council to the pod. The pod will take over many of the in-progress activities (and is unlikely to change direction on those). The POD is ultimately answerable to the council and INDEX holders.

@Matthew_Graham

Regarding the budget, I am not sure a rapid is the sole tool here. Think of the request for funding as presenting a business case to the community. The rational to define a mult-million dollar request will need review and input beyond the Liquidity Pod much like how a Nest Requests funding. I suspect OKRs etc, will need to be thought through and detailed to attain said budget.

I think RAPID is the perfect tool, the document includes the recommendation of the author (in this case myself) and allows input from multiple stake holders. Ultimately the Wise owls will need to agree, then we send it to IIP to decide / confirm.

@Matthew_Graham

My expectations and those of @Finance.Nest is this liquidity pod will act within guidelines similar to how the Finance Nest manages its stable coin allocations. I don’t see a scenario where the community assigns a sum of money into the control of a select few without said guidelines.

I don’t see a need for such a bureaucratic system. The RAPID structure and composition of the liquidity pod means that it has a broad range of inputs from across the coop and oversight from council (and the community).

IIP-110 gives us a mandate to set up a POD, and describes the scope:

Obviously, there are some details to be filled in, these will be done by the pod with wise owl agreement.

I’ve made a start on how we should conduct the RAPIDS (with input from @Cavalier_Eth )

---

As I said above, This IIP is to get INDEX holders to agree to the delegation of INDEXcoop assets to the Liquidity POD. The specific value delegated is still being discussed within the RAPID, and will be shared in the proposal before we goto snapshot vote.

By presenting a proposal that has been written based on a RAPID (which includes input from T.Nest, F.Nest, G.Nest, and has agreement from the Wise owl council), we make it easy for INDEX holders to see that the IIP has broad agreement from the INDEXcoop contributors. In addition, by reading the RAPID doc, INDEX holders can see how we reached an agreement for the proposal, and that any dissenting voices were considered.

[Matthew_Graham]

@overanalyser

In addition, by reading the RAPID doc, INDEX holders can see how we reached an agreement for the proposal, and that any dissenting voices were considered.

Can you please share a link ?

[sixtykeys]

@overanalyser

Proposed & agreed but not deployed expenditure

Product	Type	Value	Link
DPI:ETH polygon	Polygon LM rewards (not deployed)	$20,000	IIP-62
MVI:ETH	Liquidity migration incentive(not deployed)	$48,000	IIP-96

Hey @overanalyser , just noting that it was agreed that IIP-62 and IIP-96 should be cancelled, and there were no plans on proceeding with the implementation.

IIP-108 was run for the purpose of cancelling the execution of these two IIPs, but unfortunately failed to meet quorum leaving these IIPs unexecuted still. If you plan to use the same amounts and specifications you made in those proposals, please do highlight this in the relevant posts. Otherwise, we request you make it clear that the request above is separate and independent of those IIPs, as the governance ops team seeks to rerun the proposal to formally cancel them.

cc: @mel.eth

[overanalyser]

Hi all, we have just proposed a simplified IIP to request budget for the coops liquidity. The new IIP will replace this draft.

Please see here:

IIP-125: Liquidity Pod - Funding Request H1 2022

IIP Number: 125 Title: Liquidity Pod - Funding Request H1 2022 Status: Proposed Author(s): @overAnalyser @matthew_graham Created: 14th January 2022 Simple Summary The purpose of this proposal is to make available a dedicated $5M budget within the Operations Account to support the ongoing liquidity needs of INDEX and Index Coop products. Abstract With IIP-110 passing, the Liquidity Pod has “the authority to spend from the Operations Account to set and achieve liquidity goals for new produ…