To continue the DPI productivity conversation in the new Product category, we recently ran into the idea that you can use $INDEX as a backstop in case things go wrong. This is currently implemented in Aave V2 and with MKR (where Maker is used to recollateralize DAI in case things go wrong).
As we add governance capabilities to DPI and extrinsic productivity via 3rd party protocol integrations, I am warming up to the idea of intrinsic productivity if the risk can be managed by the community and backstopped by the community. The idea is that if components in DPI are used in staking governance or lent on Aave and tokens were lost, then $INDEX would be sold for the underlying components to cover the windfall.
As the community would benefit from further growth and potentially some of the fees from putting the assets to work, the community would be responsible for voting on the risk its willing to take and the burden if things go wrong.
In general, I take the view that we should make the DPI productive by dipping our toes in the water (and take incremental steps with calculated increases in risk) vs diving in deep immediately. This allows us to understand more deeply the tradeoffs of various approaches and revert if necessary before we ever get in the red zone.
And it allows DPI to continue to be boring, but also incredible useful and productive.