I am FOR this IIP which continues the direction of a Pod’s previous extensive work on this, much community discussion and a previous IIP.
Am I correct that the only real change here is some language/terminology and moving to a 200% multiplier for active participants? @Matthew_Graham @Metfanmike There do not appear to be any other significant changes.
With the token price where it is, this isn’t a pay day anyways - and not sure it was crazily before. But, the token price being low does offer some interesting potential tax advantages - as opposed to receiving the airdrop at an $INDEX price of $25, say.
I’d also want the analysis of ‘retention’ here to understand a reasonable behaviour of people selling for conservative tax planning reasons (if they choose) - ie selling 30-50% each month upon receipt. That would not represent suboptimal behaviour in my mind - though I will probably wait to sell for tax coverage (could get egg on my face though).
Standard COI disclosure: I am a potential beneficiary of this airdrop.
UPDATED: with more information on why I am FOR and why I believe the community, investors and methodologists should be to
- I think the logic to the airdrop’s size and mechanics is well-thought through and reasonable. (Maybe I would say that, as a previous member of the Pod looking at this issue).
- The airdrop isn’t large - 1.5% versus an initially proposed 7%
- The airdrop enables the core contributors, with the most tenure and context (inc. many on the council), to own a larger % of the Coop, therefore have more influence at Snapshot. Unless we change our governance structure - which will take a while and be contentious with large holders with less context - this is the best way to enable core leaders to influence the Coop’s direction. These core contributors are i) the best talent we’ve got right now as executors and ii) within them there are some quality leaders I believe. This DAO will probably fail or survive (and maybe win) - I think it’s that binary - over that next 6-18 months with the talent it has and potentially some new talent too. Wholesale new talent and personnel change is unlikely in my view for a few reasons, including time, bums already on seats, incentives, etc. Finally, we launched F all products in Q3 and Q3 in 2021 - we’ve launched four new products in 2022! A good turnaround, though I believe we need to balance simply launching products with focusing resources on growing the ones that really work (as other investment platforms do)
- Economic incentives do matter (alongside non-economic ones) and our community’s talent has many alternative opportunities competing for its interest. The airdrop helps improves the economic incentives for core, long-term, still active contributors
- I also believe the airdrop could well create behavioural change, in that it most rewards core, long-term contributors, who then - due to how the airdrop interacts with the DSM and their new stablecoin salary - have an incentive to hold their position (as opposed to liquidating it) due to the increased play it enables in the DSM. There is also a vesting schedule on the liquidity - even if it, as I understand it, is all available for DSM from day1. This critical ‘stickiness’ logic was seen to be robust by the Pod looking at the airdrop and incentives in Q4 2021 (and I believe investors and Set too!) and I don’t believe things have changed to render to logic flawed today
- Outside of the general macro points above, there has been significant signal given on this issue (via the aforementioned Pod, work shops/leadership calls, investor feedback, IIP and lack of negative recent signal/expectation management from the Index Council) which has influenced community members behaviour. Ie - selling down some $INDEX (to pay taxes or costs) in expectation of the airdrop; accepting Full Time offers with the expectation of stables + airdrop + DSM = package. This issue is different perhaps to some of the ones above, but potentially also very weighty - interacting with our DAO (and other DAOs too) is hard (just ask a few of our methodologists) and we shouldn’t mismanage the expectations of our most valuable resource (our talent).
All this said, as I wrote as the author/co-author of one of the prior forum posts on this subject, ‘With great power and ownership, comes responsibility’. If this IIP passes and the airdrop happens on top of the DSM, it’s really on the core of this community (those who do stay the course) to make Index Coop a success - and be good actors with their $INDEX holdings. Eyes should also be on contributors re simply dumping all their $INDEX.