I don’t think I fully understand the relationship between Set Labs, Set protocol and INDEX coop. And I suspect that I’m not the only one…
From the Token sets FAQ:
TokenSets is the first application built on the Set Protocol, which allows users to buy and sell tokenized portfolio management strategies easily. Set Protocol is a protocol that allows users to create, issue, redeem, and manage portfolios of ERC-20 tokens in a completely trustless way. Learn more about Set Protocol here
Set Labs Inc. is the company building the Set Protocol smart contracts. Set Labs Inc. does not serve as managers for any Sets, act as a counterparty, or custody anyone’s funds on TokenSets. Set Labs Inc. may participate in each open auction as a participant along with any other liquidity providers. Learn more about Set Protocol here
So in V1, Set labs were not managing any sets, and (as far as I understand) did not receive any income from set managers [i.e. Set Labs are currently burning cash with minimal income].
V2 sets have been launched, and Set have been involved in the first three v2 Sets (ETH WBTC Yield farm, ETH USD yield farm, and DeFI index DPI with DeFI pulse). So Set Labs will now start to benefit from streaming (and other) fees.
INDEX Coop is a decentralised organisation launched by Set Labs and DefI Pulse to build a community tomanage, market and reap rewards from the creation crypto based index sets. As founders Set Labs and DeFi Pulse control 30% of the total supply (subject to vesting etc).
INDEX coop is currently distributing the INDEX governance tokens by a combination of retrospective air dropping on DPI holders and ongoing DPI:ETH liquidity providers. So INDEX coop farming is driving a substantial increase in DPI AUM (which is good for Set Labs v2 streaming fees).
So a few questions occur to me:
What is the road map for Set Labs to become profit making?
I see a few potential income streams:
- Consultancy / coding support for community set creators
- Income from INDEX tokens
- Income from the manager of Set Lab sets on the Set protocol
- charging streaming fees for all Sets on the Set protocol (is this even possible)
- Charging a fee based on the purchases / sale of Sets via the tokensets.com website (as apposed to sales on secondary markets like Uniswap).
Other questions include:
Do Set labs and Defi pulse intend to transfer the 0.95% streaming fee for the DPI index to INDEX coop? (Note I personally don’t think that they have to, as DPI was created before INDEX coop was announced. However, INDEX coop could easily launch a similar INDEX and cannabalise DPI AUM)
Do Set labs see INDEX coop as the sole route to launch future sets to the market, or do they (Set Labs) plan to launch and manage Sets outside the INDEX coop community governance? (Again, I would see no problem with that so long as we understand the differentiation)
I understand that Fair Launches are a hot topic at the moment, and that there are multiple opinions on the best approach. I’m grateful for the change to get involved in an INDEX community and to share some of the governance rewards as we build a part of DeFi.
Uniswap approached fair launch / decentrralisation via launching a governance token that covers the entire Uniswap entity. By launching INDEX coop, Set Labs did something different. I suppose I’m trying to understand the rational for not copying Uniswap and create the “SET” governance token.
I think my key question is:
Should I as a INDEX holder consider Set Labs to be a competitor for Set marketing and governance rewards, (admittedly one that is partially aligned with my interests as co-owners of INDEX tokens). Or should Set Labs be considered as the incubator / core team for INDEX coop who will eventually be assimilated into the INDEX coop as part of a planned decentralisation?
I understand that Fair Launches are a hot topic at the moment, and that there are multiple opinions on the best approach. Personally I’m grateful for the change to get involved in the INDEX community and to share some of the governance rewards as we build a part of DeFi.
If anyone can point me toward any published (or write?) information on the vision for Set Labs and how it relates to INDEX coop, I would be extremely grateful.