Should the coop set up a more experimental approach to launch simple funds?
This is not an original thought, I know a few people have been discussing it at different times and the lack of a launch to date indicates that the consensus has been to delay. But the idea keeps coming back to various individuals.
With the acknowledgement of the current constraints on Engineering resource I think it’s worth opening the discussion to the smartest people I know: INDEXcoop
As the Product Working Group Lead I’m very aware that we have a number of excellent proposals for products and that are stuck in a limbo between the initial proposal and the launch to market.
|TTI||Failed DG2 quorum|
|dVIX (volatility)||Pre DG1 discussions|
|SYI (Stable yield)||Pre DG1 discussions|
|iRobot / PMI||Pre DG1, back test|
|Category Winners||Draft proposal|
|Uphold Defi||Draft proposal|
|DAO Lego||Sentiment check post|
|Sentiment (SODA)||Draft proposal|
Whenever I see these posts, I’m impressed by the thought and energy that has been put into them and I have a number of questions:
- How complex is it to build and maintain?
- How big is the market / do we have product market fit?
- What is my gut feel about the product?
#1 is easy to estimate, some products are are very complex (FLI), some are no standard, generally to capture income (SMI), others are simple collections of governance tokens with periodic rebalances via swaps (MVI and DPI).
#3 is purely personal on the product proposal.
#2 is in many ways the most difficult question, How much will people hold / trade?
We have developed tools to assess products as part of the process from idea to launch, but Product size / market fit is still (at least for me) the great unknown. We are learning, and Punia presented a great group of insights gained into our products here:
So, what is the goal of the coop?
Grag’s excellent post summarised the coops Q2 goals as:
With those learnings downloaded, let’s look again to our Q2-2021 pursuit of 4 aggressive growth goals:
- $500M AUM
- 400,000+ DPI supply units
- $9M FLI suite 7-day moving average volume for 2 consecutive weeks
- 4 new products launched with $200M+ combined TVL. They are category leaders in terms of the most relevant measure (i.e. uTVL, volume, liquidity)
With the engineering challenges we face, full coop product launches are going to be slower than we might like.
A potential INDEX.Labs goal:
To improve the coops process to help identify sector winning products for full scale launch by running smaller on-chain funds.
So, how could it work?
As a start, I would suggest the following as a Minimal Viable Product:
- Methodologists agree that they want their proposal to be considered for the .Labs.
- Coop community decides on 1 (or 2?) proposal to launch within the .Labs.
- We communicate the planned launch date and run time (6 months?)
- We open an address to allow users to contribute ETH.
- After the agreed period we do the initial swaps and issue the tokens via the multisig to convert the pooled ETH into the fund token
- Then we manually distribute the fund token to depositors.
- At the end period, we either unwind the product (convert back to ETH?), or we migrate it to a full product.
- At least 50 ETH deposited before we launch.
- 400 ETH supply cap
- 6 month runtime
- White listed addresses / INDEX holders / threshold only
Coop resources required:
- Minimal possible Eng support to set up multisigs, create the Set, training on rebalance etc.
- Community members to hold multisig to participate in launch, distribution, and rebalance.
- ETH for gas
- [optional] INDEX as a stipend for the methodologist and multi sigs.
- [optional] ETH to co-invest in the fund to build AUM
- [optional] ETH to co-invest in the fund and then create and seed liquidity to Uniswap to allow trading.
- What would be the goal of such a programme?
- What implementations should we consider?
- What are the pro’s and cons of doing this?
And eventually, do we want to advance to a formal proposal to do this?