Proposal: Product Working Group

Governance Proposal
1

Situation

What are you proposing?

I am proposing the formation and funding of a Product Working Group for 3 months ending on 30th June 2021.

What is the core problem(s) you want to solve?

The INDEXcoop has limited resources (Capital, Engineering, Marketing, Business Development, Design, Coordination) and a vast space to work in.

We have the capability to launch almost endless index funds, the challenge is to ensure that we are focused on what the customer needs and what the coop can deliver.

[Note, to try and remove ambiguity, I’ll use “fund” to refer to the on-chain structured product and “product” to refer to the wider concept of the WG’s goals.]

Why is this worth addressing today?

The coop’s portfolio has grown from a single fund to four funds (DPI, CGI, ETH2-FLI and MVI) and has an expanding pipeline of products that could be launched. Co-ordination and consideration of the different funds is required as the coop portfolio grows.

How will you address it?

The product WG is a cross-functional hub that focuses on the customer, balancing their needs with the INDEXcoop’s capabilities.

To be effective we need to understand:

  • What our customers need (with Marketing and Analytics)
  • What’s possible with smart contracts (with Engineering),
  • How our products behave/are used (with Analytics)
  • How we can ensure they are available to use (via composability, on-chain liquidity and business development)
  • How our fund design affects the potential for intrinsic and extrinsic productivity, and our partners ability to integrate our funds. (With Growth and BD)

Ultimately the aim is to create a portfolio of funds that satisfy our customers’ needs and to generate income for the coop.

This working group will do the following:

  • Work with potential methodologists to prepare IIPs for DG1.
  • Participate in work team assessments between DG1 and DG2.
  • Recommend Liquidity mining programmes to support product launch (via IIP’s)
  • Make strategic proposals to other DAO’s (CREAM, MakerDAO, Synthetics…) to improve the utility of our funds.
  • Fund targeted activities to support fund KPI’s.

[Note post launch there will be some overlap with the growth WG, I think that the Product WG should have a focus on making each fund as attractive to the user as possible (utility and liquidity), while the Growth WG should be focused on widening the funnel and capturing new users]

What impact will this project have?

  • North Star: Unit supply growth for each fund.
  • Individual product KPI’s
    • Monthly growth in unit supply
    • Onchain liquidity > $1 m of the fund token (i.e. equivalent to $2 M for a v2 Uniswap pair)
    • Monthly reduction in net cost/increase in net profit (i.e. after coop LM) to the coop.
    • Dominate AUV compared to competitors

Working Group Leader(s)

Request for funding

Proposed Budget:

  • $22 K Leader stipend
    • $6 k in April (I will still be working my notice period)
    • $8 k in May and June
    • Other contributors would receive rewards via the monthly rewards distribution.

Use of Funds:

Funds would be used for leader stipend and I would recommend community rewards for other members of the WG.

Requests for significant coop funds (e.g. 90-day product launch liquidity mining), or other resources to support fund utility or availability (e.g. shorter loopring incentives) would be made via forum proposals.

Organization - How will it work?

What will you be doing?

During the next 3 months, the WG will

  • Discuss new fund ideas with potential methodologists.
  • Carry out work team analysis of products between DG1 and DG2.
  • Draft a white paper on Intrinsic productivity.
  • Prepare proposals for other protocols for external productivity/integration (MakerDAO, Synthetix, etc).

How will you interface with the community?

The WG will share status and progress via:

  • Participation in the weekly coop planning call.
  • Hosting product WG calls every 2 weeks,
  • Supporting new product proposal drafting.
  • Prepare work team reports between DG1 and DG2.
  • Propose IIP’s recommending liquidity mining to support fund launch.
  • Maintain a Gantt / roadmap for fund proposal/launch and ongoing management.
  • #Product channel in Discord

Commitments

I am committed to Index Coop principles

I am committed to serving the entire Index Coop with my work.

I am committed to open, rapid communication: I know that clear, constant, public communication lifts up the entire Index Coop community. I am committed to this style of communication.

Shared learnings: I will share my progress, learnings with the entire community. I will ensure that anything I create is accessible beyond my own tenure for future generations of Indexers to access & build on.

Intellectual honesty: I am committed to growth and improvement. I am open to feedback and will use feedback to improve my work for the benefit of the entire Coop community.

I am committed to making Index Coop a welcoming, fun, and engaging community to work in!

Lets create a Product Working Group
  • For
  • Against

0 voters

7 Likes
2

Thanks, think this deserves its own WG. A couple of the hard questions:

Would you agree that our liquidity mining intitiatives have erred well over to the side of over-incentivization?

If so, would be curious to understand your thoughts on erring towards more frugal allocations in the future.

3

Great questions

Liquidity mining DPI has been generous with the goal of building AUM that surpasses our competitors, to allowing large holders to have some confidence in exit liquidity and to make arbitrage more favorable so the price stays close to NAV. So yes, we have paid for a deeper pool than we might have needed (II still believe that “too high” incentives results in a deeper pool as liquidity evens out the APY to a market rate for a particular pair over a few days).

I think that for DPI there was an unspoken desire in that we didn’t want to see a significant drop in circulating number of tokens (apart from the initial drop in early Dec).

With Exchange issuance going live and more funds being launched, I think that we will have to accept that circulating supply isn’t going to increase every month for all funds.

For DPI, given that we have ~2x the liquidity we have been targeting (~$30 m), and The INDEX price is 250% of that 30 days ago, I think we could comfortably reduce rewards for the next cycle by a factor 5 (or possibly /7 to reduce 700 INDEX per day down to 100).

After that I would prefer to stop mining DPI so it moves form a cost to an income stream. I suspect we may see liquidity drop below $30 M, but I think it will naturally be in excess of $10 M.

For MVI, I proposed a mining strategy that is intended to target $5 M liquidity for the first 2 30 day periods and at least $2.5 M in the 3rd 30 day period. The proposed strategy is intended to allow LP’s to enter the pool knowing that they will get something for 90 days, but giving the coop some flexibility to act within defined ranges. Targeting $5M liquidity shorty after launch is intended to ensure that the MVI launches with a bang and hopefully dominates the sector. After 90 days of Liquidity mining, we should have a feel for how many long term holders there are (as opposed to farmers)

If TTI and BED are approved, then I would most likely use the MVI LM as a template with a similar set of assumptions and target liquidity.

For ETH2-FLI, the fact that we have 40% (?) of the tokens in the uniswap pair means that we could quite possibly launch with no liquidity mining. So any INDEX incentives could be considered over-incentivisation. however, we don’t know the size of the opportunity for ETH2-FLI, so it’s possible that LM opens up a step change in adoption. - I don’t know what will happen when we LM FlI, apart from it will be different to DPI:ETH.

I suspect that we may see FLI token numbers circulating to be dependent on market sentiment, and we may see LP token numbers being similarly sensitive (i.e. sell LP token for stable coin if you think ETH is going down, then rebuy LP token in the dip). As the token set website for FLI prevents US persons trading directly, it’s possibly FLI liquidity dries up during a bear market. Therefore, the optimum solution maybe to incentivise the pool during bear markets - But this will need more thought.

Liquidity mining is one of our most expensive tools to use. So it’s critical that we consider how we deploy it and the goals for each use (High impact launches, Liquidity, AUM, market dominance, building partnerships).

2 Likes
4

This is great to see OA!

I think this list is a good starting point. Some other things that I see this WG doing:

  1. Customer research (surveys, calls, etc.)
  2. Market research (talking to other protocols, analytics on top protocols, thinking about the future)
  3. Rebalancing support
  4. Cross-functional coordination support (moving between engineering, marketing, BD, etc.)
  5. Managing product pipeline excel and prioritizing

Ultimately, the Product WG is going to be super core to the success of the Coop and any products we launch going forward. Happy to support in anyway I can!

4 Likes
5

Also wondering if we can refine these a little bit. Basically, we know the product group has succeeded if we’re launching products that people want.

In that case, perhaps the metric to focus in on is # of products that are their domain leaders.

Growth might get confused with the marketing team and BD team’s objectives.

1 Like
6

I am really excited about this group! And looking forward to contributing towards it. I see this group playing a vital role in growth, BD & marketing activities going forward. Adding to @puniaviision suggestions I would also like to see:

  1. Competitor product analysis framework
  2. Product risk framework
  3. Product specifications for more efficient operations in growth, BD & marketing activities
1 Like
7

Quick question – How would you order-rank these in terms of importance right now?

I see other folks suggestions you take on even more :slight_smile: curious which focus-areas you believe will be most impactful given where the Coop stands today.

8

I think unit growth needs to be the core KPI for the product WG. It’s the coops North star for a good reason.

Domain leader is a good addition to the KPI’s, although there some aspects of that that could be outside the coops control.

I think there is always going to be an overlap with Growth WG and DB, we are all aligned under a single North Star, so I would be worried if we didn’t.

To achieve continued unit growth we need good products and good marketing / DB. If product creates funds with poor product market fit, then we are handicapping the entire coop.

9

I would say the ranking for the Product WG should be:

  1. Creating excellent funds for release - Pre DG1 to DG2.
  2. Intrinsic productivity - It’s been on a back burner for too long.
  3. Liquidity mining for product boot strapping at launch and continued integration into DeFi.
  4. Integrations with other protocols / liquidity mining outside Uniswap etc.

1 is critical because a poor product has long term implications
2 will also have long term impact on the coop - if we get it wrong we loose reputation and market share.
3 While often discussed is less critical - if we over incentivise we have wasted some INDEX, if we under incentivise we may get less liquidity / allow a product to be overtaken for AUM - Niether is good, but we know the risk, we can monitor it, and we can take corrective action.
4 comes after product launch and has significant overlap with Growth and BD, so slippage / errors can be recovered

1 Like
10

OK, The first product working group call will be Monday 5th at 13:00 PDT /20:00 UTC / 21:00 UK.

Please send me your email address if you would like an invite.

11

Late comment after voting YES.

What about these index product ideas?

  1. Decentralized Cloud Index: data, compute, graph, APIs, storage, etc, tokens (part inspired by this investing firm’s deck slide)
  2. Decentralized Identity Index: might be few tokens to find here, wrapping needed, and low liquidity

This is going to be a great WG.

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