MVI - Growth Budget Request

Summary

Building on the initial success of MVI, we have a number of growth initiatives in the works to help spread the word about the index. We are looking over the next 3 months to break into the customer base in the NFT gaming sector, using MVI as a natural intersection between DeFi and the metaverse to help educate people on the wider crypto space, and the power of index investments. We are requesting $128k to carry out these initiatives.

Hypothesis

NFT gaming is a fast growing sector, onboarding a whole new cohort of mobile tech-savvy users to crypto from countries all around the world. While a DeFi native who wants exposure to the metaverse trend will simply purchase the tokens they feel best represent their view, we are looking toward the group who don’t know about the possibilities their newly downloaded web3 wallet offers. The hypothesis is that unlocking this group, while it may be tough, will be more valuable as it is effectively white space.

We are also implicitly assuming the 25% APR incentives for providing liquidity to MVI/ETH will not be enough to compete for more DeFi-native MVI token holders. As such we are pursuing the following experimental initiatives over the next 3-6 months.

TL;DR

Gaming Guild - Build up Axie farm, earn $500 - $1800 in yield per month, enable less advantaged users, can leverage education and marketing ($20k)

Streaming Sponsorships - MVI ads and walkthrough videos, audience outside of western sphere ($18k)

Virtual Music Festival - Unique marketing opportunity, breaks outside of crypto ($15k)

Incentivise Supply Directly - Increased unit supply, test whale demand ($50k)

MVI airdrop to DPI Purchases - Spreads the word, increased unit supply ($25k)

Detailed breakdown of initiatives

Managed gaming guild in partnership with Yield Guild Games (YGG) - $20k

YGG is set up to onboard new NFT game players, getting them upskilled quickly to take advantage of the fact they can play-to-earn. Normally, a guild manager would take on the responsibility of creating teams and teaching new players what they need to know to begin earning.

In exchange for a split of the earnings, we’ve agreed with a member of YGG that he will set up an Axie Infinity guild, manage the breeding of Axies and coaching of players, and Index Coop will put up the capital to purchase the Axies and $SLP/AXS to create breed them, creating more teams. By creating a farm we can expand to 24 scholars in a couple of weeks, a good number for our first 3 month experiment that can easily be expanded in future.

The full proposal is attached, but in essence we expect a roughly 5ETH upfront cost, yielding between $540 (conservative) and $1800 (today’s price) per month. The underlying Axies will belong to Index Coop, including all those that are subsequently bred from the originals. As more offspring are created this of course lowers the average cost of our Axies. The costs therefore breakdown as follows:

12 Axies to create the farm - 3 ETH - $8000 (01/06)

$SLP and $AXS required to facilitate breeding - $7500 (inc. breeding update and 01/06 prices)

90 Axies in total

Earnings split 70/10/10/10 between Scholar/Index Coop/YGG/Manager

Expected earnings per scholar 150-200 $SLP/day

Return of $540 - $1800/month to Index Coop, or 50% APR

Besides the diversification of yield and our treasury, other benefits include:

  • Giving people in less economically advantaged countries an opportunity to earn by reducing the barrier to entry.

  • Partnership with YGG can be expanded to other games (REVV, Illuvium, etc.)

  • Hands off approach that generates passive income for our Treasury.

  • Good Axies hold their value in ETH terms so we will retain most of our upfront investment and potentially make money if we wanted to sell all our Axies, including the ones we bred, in the future.

  • Joint marketing opportunities.

Streaming Sponsorships and Content - $18k

We have approached two streamers within the space, representing different audiences, to help spread the word about MVI. Both are focused on educating their followers about the opportunities in NFT gaming and crypto as a whole. We expect that their audiences are probably wondering what to do with their newly earned tokens and there is an opportunity here for us to expand on why indexes are powerful, but also to talk about building a portfolio more generally.

What we are proposing to each is slightly different and is detailed below.

Kookoo - 11k subs, 3 vids/week, educational content in English and Filipino.

  • MVI explainer video
  • AMA/Interview to talk metaverse and MVI
  • Sharing educational articles with his community

$1000/month for 3 months

CagyJan - 15k subs, 3/4 vids/week, education, opinion, interviews

  • Long term (6 months) sponsorship with 10-15 sec ad placement on videos (@DevOnDeFi would be great to work with CDWG on this)
  • 1x MVI (potential for other index coop products) explainer video
  • At least 1x AMA/Interviews on Discord and Youtube

$2500/month for 6 months ads + ability to expand content to other products

Benefits:

  • Marketing to a new segment, through Youtube which broadens scope for Index Coop
  • Educating NFT gamers about the benefits of DeFi and index products
  • Reaches new markets and shifts focus from western hemisphere

Virtual Music Festival - $15k

On the more ambitious end of the spectrum, we are working with @Static121 and @caf from the creative team to look into hosting a music festival in Decentraland or Crypto Voxels. With Index Coop/MVI as the headline sponsor this creates an enormous marketing opportunity, especially as a festival hasn’t been attempted before (plenty of one-off events though).

The plan would be to land a headline act and build a lineup around that, renting space in DCL/CV accordingly. The festival would take place over 2-3 days and feature:

VIP area for MVI holders - educate about metaverse, have airdrops or games to win something

MEME / Opensea / Rarible - NFT exhibition and auction

Involve a record label to not have it be in the Blockchain bubble - the first record label associated with a virtual festival of that scale

Fashion brand to support merchandise - digiphysical collection

A drink brand - Strong branding move and maybe we can sell drinks at the concerts which give a power up or change the vision to something cool and memorable so it’s actually an experience that’s been missing on virtual events so far.

We see the benefits of putting on this event as:

  • Huge publicity for MVI/Index Coop
  • Utility for MVI holders
  • Educational content for holders and non-holders alike
  • Chance to partner with real-world brands and expand scope outside of crypto

Direct supply growth incentivisation - $50k

The purpose of this campaign is twofold. One is to test if there’s an appetite for MVI from whales. Two is to increase unit supply of MVI through direct incentives.

How is this going to work? The campaign will directly incentivise minting of MVI supply units with INDEX. Similar to the Zerion campaign we would provide a 5% cashback in INDEX for minting MVI units either via exchange issue or direct mint. However, the cashback will only be available to those minting $50,000+ of MVI.

5% cashback on a $50,000 purchase is $2,500 in INDEX. Minting directly costs about $600-800 in transaction fees. So even after transaction costs, the cashback is still about 3.5%, which we think is attractive based on our experience with Zerion. At this level, minting new MVI and redeeming it for the underlying is not profitable enough to go through the effort. Even if someone mints $50,000 MVI and sells it on the open market, those units will remain in circulation generating fee income. Furthermore, a sale of $50,000 would result in price impact that would eliminate any profit. The cashback will be capped at 5% of $50,000 so $2,500 regardless of how much is minted.

What do we get from this campaign? First, we get information about the demand for MVI from whales. Second, with $50,000 in INDEX rewards, we will be able to create $1m of mint volume, which at current prices is about 22k supply units. This is an increase of close to 30% in outstanding supply units from one campaign. It’s also an important experiment in incentivising unit growth directly.

We would work with the Analytics Working Group prior to starting the campaign to build out the analytics tools to measure and monitor its effectiveness.

Campaign to incentivise DPI purchases with MVI - $25k in MVI

This campaign is the iteration of the original Zerion campaign. With the original campaign we have established that there’s a lot of demand for DPI and that 5% cashback was too much.

We believe that about 2.5% should be a sufficient level of incentive. Furthermore, instead of incentivising DPI purchases with INDEX, we want to incentivise DPI purchases with MVI. Incentives will be capped at $25,000 in MVI and we will work with either Zerion or Zapper to run this. The goal is to test out if the market has preference for MVI over INDEX, zero in on the right level for incentivisation and generate more publicity for MVI.

Other thoughts on this promotion. Because users will be buying DPI and getting MVI, they will be paying the streaming fee on both products. Therefore, the campaign will cost us less than 1%. This is significantly more efficient than what we are paying in liquidity mining incentives. Furthermore, with MVI’s liquidity mining incentives currently at 90 INDEX per day, we need to find other ways to generate excitement and drive volume & supply growth.

Methodologist’s Bounty & Ad Income

As part of taking on the role managing MVI from within Index Coop, Verto and I agreed the bounty would be recycled back to the Coop. This is currently averaging around 800 $INDEX/month which is $26,000 at today’s price of $33. It’s worth mentioning this firstly because not everyone seems to be aware, and secondly because it goes a fair way to covering the expenses we have laid out above. We would love to see these tokens recycled back into a productive use to help MVI continue to grow.

Another thing we want to mention here is that we have been approached to run ads on our MetaPortal content at a rate of $1k/month rising to $2k if we reach over 500 subscribers. As creators of this content we will keep the income from the ad program but want to be transparent that the agreement is in place.

Next Steps:

Discussion and feedback

Turn this post into IIP format after 2-3 days

Hold IIP vote

Appendix

Index_CoOp_Scholarship_Proposal.pdf (663.2
KB)

19 Likes

I think we should do most, if not all, of this. What did you have in mind for timing, funding logistics, and priority among these?

From my perspective, the proposals range from well-considered and just ready for capital (Axie farm and specific streaming partnerships), to exciting idea that needs fleshing out because it requires coordination and time (Festival), to testing alternatives to liquidity mining (whale incentives, cross-sell airdrop).

Given the above, should we fund the no-brainers now and then allocate a portion of the bounty to ongoing expenses or things that will require iteration like direct incentives? This (understandably) reads a bit like a working group proposal but you rightly point out that MVI itself produces funds for the Coop so should be thought of a bit differently.

Yeah it was specifically put forward in the same style as the working groups, the idea of a 3 month period where we deliver a set number of initiatives and test the results against a hypothesis. So with the above post being an initial proposal, if there are strong feelings that something should be left out, or the numbers are wrong/not good ROI, it’s possible to discuss and potentially change prior to solidifying into an IIP.

I think we would prefer to work in the same way as wg’s do, in that we can run a 2/2 multi-sig with the funds in and be allowed the flexibility to move forward, while our monthly updates provide accountability on progress and spending.

In terms of priority, we are aiming to manage all of the ideas concurrently, but naturally as you’ve spotted some are more ready to go than others. We have already stopped work on some ideas and re-jigged this proposal a few times to get to this list, so I’d say they are all high enough priority to test, but the direct supply and MVI airdrop experiments will both have learnings that apply to the Coop more widely. The other 3 are the mv equivalent of lending market integrations/yearn vaults.

2 Likes

I would add that we think the festival currently has the most work / open questions in terms of timing and execution.

The Zerion promotion we have a template for already and, assuming Zerion are interested in running this again, the execution should be fairly straightforward.

Direct incentives for new supply are something we are pretty keen on. It allows to test whale demand but also run the first experiment of its kind in direct supply incentivisation. We generally think that Uni v3 will reduce the need for liquidity incentives and open up some financial room for other types of incentive structures. Given unit supply growth is effectively the main driver of our revenue, it makes sense to incentivise that directly.

4 Likes

Makes sense, just wanted to see what you had in mind.

Couldn’t agree with this more and think we should start testing and measuring ASAP. As DFC mentions it has broader implications for the Coop.

I tend to cut straight to constructive feedback, but did want to mention I’m VERY excited by the Guild and Festival proposals.

7 Likes

Excellent post and I’m broadly in favour of all of these tactics, DFC and Verto,

CDWG is ready to help with whatever you need - we’re strongly resourced.

Look forward to seeing the data on how some of these tactics deliver results.

4 Likes

this is excellent – incredibly clear what you plan to do and why. It’s also nice to see a mix of experimentation and surer-bet tactics.

I found the following two points especially helpful for understanding the MVI viewpoint :point_down:

this was super helpful framing :raised_hands:

likewise

12 Likes

Solid. Big plan well laid out. I like it and think the ambition and ideas fit well at this stage. I look forward to seeing it develop into a refined plan over the next few days. Good work!

2 Likes

Strong support - MVI will be a cornerstone of IC’s portfolio for years to come.

Awesome work putting this together and really thinking outside the box. Increasingly I see MVI and the MVI team as the bridge between IC and the creator / NFT economy. These platforms will dominate digital content over the next decade. Forming deep relationships now pay massive dividends.

7 Likes

Strongly for. Great for MVI, great experiment and learning opportunity for IC.

Also sounds fun! Will we need virtual tents for the festival? :slight_smile:

1 Like

sounds like a great experiment and will make MVI stands out as the default NFT fund to get in.

3 Likes

Was this pushed through? Hows the progress on this?

2 Likes