Moving MVI in-line With the Fee Split Model

[Thomas_Hepner]

@DarkForestCapital

Having said that, it’s pretty profitable from the numbers we’ve seen (thanks @MrMadila) so would be advocating for it based on the benefit to ourselves and the Coop.

We proposed the final DATA index IIP with the new fee structure you are proposing for MVI specifically because we thought it would boost revenue substantially and create a better product for index holders.

@Thomas_Hepner

Data Economy Index (DATA) will have a streaming fee of 0.50% (50 basis points), a mint fee of 0.10% (10 basis points), and a redeem fee of 0.20% (20 basis points).

I got mint/redeem volume data for DPI and MVI back in July from @jdcook to create a revenue model for this exact fee structure. My model implied that this fee structure would increase simple index profits by ~50% over standard 95 bps streaming fee.

@verto0912

Yeah, basically, if we have the functionality to add mint/redeem on simple indices, we would like to see those added on MVI. Prioritization is 100% up to PWG and EWG.

I’ll defer here to @Cavalier_Eth and EWG, but we are expecting this to be done for DATA and are awaiting an ETA because EWG is not able to support at launch. I’d imagine that if this work is completed for DATA it could be readily applied to MVI given that they are both simple index products?

@verto0912

Slightly off MVI, but I do believe that mint/redeem fees should be set and decided by the Coop, not individual methodologists. Mainly because I struggle to justify why 1 simple index would need mint/redeem fees and others won’t. Makes more sense to me to settle on a level of mint/redeem and apply to all simple indices once the functionality is developed.

Not anything major, but I both agree and disagree with this. I only disagree because mint/redeem is untested for simple index products at Index Cooperative. Do I believe it will be more profitable for DATA? Yes. Do I think it’s an that we want to do before applying to across the board? Absolutely.

I don’t think there is any reason that fee structure for products needs to be decided by the Index Coop (meaning coin voting) instead of by methodologists themselves. Methodologists should be rational, profit-maximizing actors. I cannot imagine that you and @DarkForestCapital as MVI methodologists and DFP as DPI methodologists would not want to convert to this model if it proves profitable for DATA. I’m not sure why we would want to burden tokenholders with these kinds of decisions when methodologists are already incentivized to act in a way that also maximize profits for Index Coop.