Two months ago we shared some realities regarding the engineering constraints for new product launches at the Index Coop.
After a couple months and focused effort by Set Labs engineers, we are no longer engineering constrained in launching simple & leverage indices.
As a refresher, Simple Indices (like DPI, MVI, BED) generally:
- Rebalance using DEXs (Uniswap V2/V3, Sushiswap, Kyber, Balancer)
- Do not include rebasing tokens
- Do not include wrapping or staking functionality
- Do not include mint/redeem fees
And Leverage Indices (like ETH2x-FLI, BTC2x-FLI):
- Rebalance using DEXs (Uniswap V2/V3, Sushiswap)
- Post & draw collateral available on Compound protocol
What does this mean for the Coop?
- We can now safely launch and operate new simple index & leverage index products, as well as improve existing ones
- We have successfully improved the safety of our existing product base, namely the FLI suite
TLDR; on what was built
- Technical Operations Dashboard
- Leverage Index Smart Contract Improvements
- Proposed, passed, and implemented
- Keeper system bot improvements
Set Labs have put together a Technical Operations dashboard to simplify & increase the safety of the rebalance parameterization process for Simple Index products. Historically, Set have been responsible for parameterizing & monitoring product rebalances. This is because the manual rebalance parameterization process is sensitive & must be done with zero user errors. The Technical Operations dashboard reduces the sensitivity of the process by including various safety/correctness checks & allows Set’s day-to-day involvement in product rebalances to be greatly reduced.
Screenshot of Technical Operations UI for DPI Rebalancing
Set has also made many improvements to the Leverage Index smart contracts & related keeper systems to greatly increase the reliability of the deleveraging system during periods of high volatility. Previously, managing multiple leverage products during periods of massive market volatility was untenable. We now have much higher confidence that our smart contracts & keepers will be robust should we experience another sharp market downturn.
New releases in these product lines will require relatively little new smart contract work, and operational overhead for their maintenance has been reduced. The rule of thumb is if a new product’s maintenance looks very similar to an existing Index Coop product, engineering can likely launch it at relatively low cost.
Much of the Simple Index product rebalancing system has been abstracted, and made safer via the Technical Operations dashboard. Maintenance & control of the Technical Operations dashboard will be the responsibility of the Coop, and the hand off to EWG is being prepared.
The keeper system that Set Labs operates to monitor ETH2x-FLI & BTC2x-FLI leverage ratios will eventually need to be handed off to the Index Coop as well. Currently the Index Coop EWG does not have the bandwidth & expertise to pick these up.
Engineering autonomy has been established as a major long-term goal for the Index Coop & specifically the mandate for the EWG. However, getting to complete engineering autonomy where the Index Coop can design, implement, test & deploy its own novel financial products end-to-end will be a gradual process.
We are still in the very early days of this at the Coop but progress is being made and we’re getting the right pieces in place to build a proper foundation for engineering:
In the meantime, Set Labs involvement will continue to be required to launch new Index Coop products, & some coupling with Set Labs’ roadmap is to be expected.
One known area for improvement here is for the Set Engineering team to more proactively communicate what is being worked on as it relates to Index Coop products. You can expect more here soon as we work to improve our own internal operations in order to make this happen.