There seems to be near universal alignment amongst the Index Coop that exchange listings are crucial to driving DPI growth. Exchange listings drive AUM in and of themselves, and they also make it easier for people to purchase DPI, thereby increasing AUM in the long run. For example, Binance has 15M users. If .1% of those bought DPI, the numbernumber of DPI token holders would increase by 200%.
However, exchange listings have costs associated with them, including but not limited to:
- Legal fees for non-security letters (ranges from ~$5K for Singapore to ~$80K for US)
- Payments to market makers to provide liquidity for DPI (~$10-$20K per month)
- Listing fees (~$20K-$400K)
- Marketing budgets for marketing promotions associated with a listing (~$5K-$10K)
We are in conversations with a number of exchanges but we need to move fairly quickly to get things done. The process can be cumbersome and involves coordinating between market makers, exchanges, and lawyers. Some of the costs associated with these things can be sensitive and are not ideal to put to a community vote.
We should seed a budget that will be used to fund exchange listings. We’ll run a strategy of initially focusing on non-US exchanges that have fiat onramps and large user bases. We can get listings done here more quickly and slowly build up momentum to drive listings on major US exchanges. We should be able to get a number of exchanges that fit this bill live for $10-$25K per exchange. We should pull funds from the treasury upfront so that we can move quickly and don’t have to put every expense to a community vote.
Examples of initial expenditures:
- Bitmart has offered us a free listing but it requires a non-security letter and a small marketing spend
- $8,000 for a Singapore non-security letter
- $5,000 for marketing promotions
- We are in conversations with Bittrex Global but this requires a Lichtenstein non-security letter
- $10,000 for a Lichtenstein non-security letter
- Both of these exchanges may ask us to bring our own market maker to provide liquidity for DPI
- $10,000 per month for market making services
- $100,000 in INDEX deposited to a three-of-three multi-sig managed by Regan, BigSky, and a member of the treasury committee (DarkForestCapital)
- 100% of funds go towards exchange listings (0 to contributor rewards)
- Regan will clear all expenses with the treasury committee as Dark Forest will have to approve them
- The committee will not spend more than 35% of its budget on any single exchange