I’ll be voting against this proposal as written.
The main reason I’m opposed to this airdrop is because it doesn’t reward performance over the long term. If the proposal used a longer vesting period (at least 3 years) then I’d have a much easier time supporting it. Even if 100% of the airdrop went to current contributors, I think it would be a mistake to let them keep all their tokens if they, for whatever reason, were no longer highly productive contributors in six months’ time.
I completely agree with everyone who thinks contributors should have a larger ownership percentage. We have to square that up with the fact that we can’t mint any more INDEX tokens. We have to make whatever tokens we have last for the next decade, or longer.
If we combine all the INDEX in our Treasury and Operations wallets, plus the INDEX left in our Treasury vesting contracts, we have about 4M INDEX (40% of supply) at the DAO’s disposal.
Considering that we need to convert INDEX to USDC to pay salaries and expenses, it’s pretty obvious to me that we’ll need to use the majority of the remaining INDEX to raise cash. It takes a lot of capital to grow a company to the kind of scale we all want Index Coop to achieve. The median amount of funding raised by U.S. companies before their IPOs was $167M in 2020. A lot of those companies weren’t even profitable at IPO.
Even in the most generous situation where we only need half of our remaining INDEX to fund operations through our high growth phase, that would leave 2M INDEX for current and future contributors. That’s 20% of total supply. I believe that is the absolute ceiling of what we can spare.
I don’t know exact numbers, but I’d estimate that we’re already set to award about 2-3% of total token supply to contributors this year alone.
As this basic math hits home for me, I’m still hopeful we can find a way to sufficiently fund our growth and for early contributors to gain meaningful ownership. Giving away 1.5% in a short amount of time, largely for past performance, is not how I’d do it. I say this as someone stands to benefit from the airdrop. I also say it as someone who knows none of this will matter much anyway if we don’t launch products with over $20M in AUM soon.
Whatever happens in this vote, I want to say thank you to the early contributors. I hope you all feel rewarded in due time.
P.S. - A number of great perspectives have come out of this discussion. I like the idea of using an incentive structure similar to stock options. @setoshi if your goal is to motivate leaders at Index Coop to act more CEO-like, I’d urge you to think about sourcing a portion of KPI-based options from Set Labs’ allocation.