The Index Cooperative Secret Master Plan [Edit - 1]

This is a draft of the Index Cooperative’s master plan. The intention is to lay out the current views and considerations on what it takes to win the index market. This isn’t perfect yet and requires feedback from everyone before it’s a plan the entire community can buy into.

Where We Are Today

The mission of Index Coop is to introduce and expand adoption of the index primitive to a broad audience beyond those already in DeFi today. In doing so, Index is well positioned to be the leading provider of crypto index products, to command large AUM / influence, and to benefit from developing the nascent crypto index market.

So far, the strength of the community has helped the DeFi Pulse Index quickly vault to $13M+ in assets locked and support one of the deepest liquidity pools on Uniswap. In addition, it’s been amazing to see the enormous amount of passion, energy, and activity in the Discord and Discourse forum directed at improving Index in all matters whether launching new indices, improving governance, distribution or incentives.

To move productively and efficiently, there should be alignment on an overarching strategic plan to achieve this goal and clear methods to mobilize effectively - which is what this document aims to provide.

Key Considerations

There are many strategic considerations to consider including:

  • Indexes are a winner-takes-most market and the first significant mover typically gets the biggest share. In the traditional financial world, most people only know about Blackrock/Vanguard and S&P500 / DJIA, all of which enjoy the benefits of higher profits, greater visibility, and publicity. Thus, it is critical for Index to be the first mover in getting its products to scale.
  • The technology behind indices is simple. It is brand, distribution, and marketing that helps gain and maintain market leadership. Thus, it is critical to reach scale and broad distribution with index products and to have a very strong, concerted marketing to spread the word. That means getting the index into the hands of millions of users. The most efficient way to do that is to have it listed on centralized exchanges, wallets, etc - which interface with users who need the product the most.
  • Getting a product to scale requires focused efforts. By successfully getting one Index product to scale, Index Coop will have built the brand, reputation, distribution channels, etc. to more easily get other products (e.g. L2, NFT, leveraged indices) to scale. Thus, it is critical we focus on getting one product to scale at a time and not on too many different indices. That means focusing awareness, marketing, and branding efforts to getting DPI listed on exchanges + wallets, mentioned in press, and evangelize to a broader audience - to grow # holders and assets locked.
  • Sustainable growth requires capturing high-retention users. As amazing as the recent growth has been, a non-negligible amount of capital in the DeFi Pulse Index today is short-term oriented and focused on reaping the yields from the liquidity mining program. The incentive program will inevitably end and the capital will shift to higher-yielding offerings. Index products have great utility for a great number of users, and it is critical to rapidly diversify the user-base to those who use the product for its intended purpose (not just yield farming).
  • New utility unlocks use cases and personas: In the traditional financial world, there are various use cases of index products. Retail users purchase indices to passively invest at a low cost, while investment funds utilize indices to hedge through spread trades or get simple sector exposure. In the crypto world, getting index products listed on lending protocols such as Aave, Compound, and Maker unlock the ability for new use cases such as hedging, margin trading, and spread trades - increasing user retention.

The Plan

Taking into account these considerations, a sensible master plan is:

  • Step 1: Focus on getting a single index to scale (1% of the DeFi market and majority held by sustainable holders).
  • Step 2: With the connections, brand, and marketing from the first success, launch additional indices that achieve scale and are leaders in their respective verticals. If we get one index listed on a centralized exchange and adopted by distribution partners, it will be significantly easier to sell the rest.
  • Step 3: After achieving high market share in each category, focus on long-term Index Coop sustainability - enjoying the benefits of market leadership.

Getting Involved

In each phase, the most effective ways to contribute would be to:

  • Step 1: Help market, spread awareness, educate, and help onboard new high-retention holders of DeFi Pulse Index. Help get the DPI listed on exchanges and wallets to expand distribution and get DPI added as collateral on lending protocols to expand use cases.
  • Step 2: Help design / create / launch new indices and continue marketing/spreading awareness of new products
  • Step 3: Help figure out sustainability whether through financial analysis, adding yield capabilities, etc.

In working together in a focused manner based on a clear strategy, Index will have the opportunity to be the dominant provider of indices and we will collectively win as a result.

Come join our discord here and the discussion at our first community call on Wednesday, 10/14 at 9am PST.

Don’t tell anyone.


@setoshi I like it and excellent master plan to get working on. To be honest I’ve gotten wrapped up in thinking about additional indices (because that’s the fun part). However focusing on growing DPI makes sense.

At the moment 90% of PDI is mining INDEX on Uniswap. Few of these will be sticky long term DPI owners.

So we should be looking at marketing, building bridges with other protocols and getting listed on CEX.

At current prices $50M means we would manage about 1% of all the tokens in DPI.


I’m not so sure about short to mid-term viability of DPI. Unless there is a massive flood of retail there’s no real reason to invest because you are missing out on governance, yield, leverage, etc. and DeFi is majority whales and degens who don’t care about stability.

I think finding an index that DeFi users and VCs have no expertise or knowledge in and marketing that is a better strategy for getting a hot index. The MetaVerse index seems a good candidate for that, I’m putting together my proposal for Data Economy index but it’s mostly LINK because, you know, so I don’t think that will attract a ton of money either right now.

DeFi is easily meme-able so maybe we try path of least resistance for now and if that fails we go to a new market (we might lose first mover advantage by that point though)


I like the draft. I agree that there should be focus on DPI before scaling indices.

When it comes to " Sustainable growth requires capturing high-retention users - it will hard to convince long term holders to buy into DPI without a performance history and security history. The yield farmers today who are holding DPI are the ones who are taking the real risk and as you mentioned post the incentive period the yield farmers would probably leave. But by then if the index has performed well, there would be some evidence to persuade long term holders to buy into DPI. For that to happen DPI has to position itself as a safe asset and today the assets sitting inside DPI are not enjoying any yields themselves, that is definitely another issue.


While I agree that missing out on the features of direct ownership of tokens is the largest downside of DPI, I would imagine the market is larger than you think. If you look at the percentages of different tokens that are being used for native staking / governance / yield, you’ll see that there’s a ton of room to grow for an index such as this.

Introducing any sort of ETF to the crypto community is going to require some creative convincing. Folks who have self-selected to participate in crypto are already more likely to be contrarian thinkers who believe they can outsmart standard wisdom. I suspect that ethos will apply within their crypto portfolio as well.

It may be counterintuitive, but the returns from staking (AAVE, YFI, SNX, etc) are relatively low and most folks are in this space for price appreciation more than dividend distribution. I imagine that a DPI index with no exposure to staking would outperform a high percentage of actively managed portfolios who do stake. INDEX distribution, when added to DPI, will quite possibly outpace the combined returns of staking all these tokens anyways.

All that said, it’s still an important consideration and I think that part of our job here, should we choose to participate in this community, is educating the public on WHY the DPI is such a compelling project.


It’s great to have a little structure laid out like this, especially at the beginning of something so new and completely community-run.

One thing I’d be cautious of is I think the target of $50m for DPI might be a distraction. The AUM will likely drop after the farming is over and while DPI is great and we should be marketing it, the first mover advantage won’t last long. It feels like after making a splash we should be pushing out new products or at least advertising the potential for other indices.

In the meantime I totally agree with getting exchanges on board to list DPI as data shows a lot of people leave their crypto with exchanges. Speaking from personal experience I know a few people that buy a crypto asset on a CEX and forget about it. From that point of view index products are very retail friendly as they are designed to pretty much set and forget. Exchanges are happy because it’s another product with fees associated, Index benefits from performance/streaming fees, and the investor can literally buy and hold something that is actively working behind the scenes rather than an individual token sat in their exchange wallet.


Thanks for the concerns re: static constituents.

I do anticipate there will be churn from those who feel that their underlying tokens are not participating in governance, staking, yield, etc. Some members have suggested either

  1. adding staking/governance/yield abilities to the DPI itself or
  2. launching a new Set that also tracks the same index but gets yield.

With 1, the pro is that there is a single asset and marketing efforts are not diluted. The con is that users must take more risk (that they may not be ready to), understand the governance / yield policies, and exchanges may not list products w/ derivative assets.

With 2, the pro is that it segregates these products so users can choose whichever one they prefer. The con is that it splits up the marketing efforts.

What do y’all think?


Great write up. There are several good points in there. But it seems too board though, it would be great if we could have a plan and a roadmap on how are we executing it.

Another thing I would like to add, I am not totally sold on focusing on DPI to lead the pack and brand. Dont get me wrong, DPI is an excellent product. I feel it’s not stable enough or lucrative enough for people to jump on it. Imo one of the suggested index, DPIaccu is a better candidate, it would attract larger group of investors.

If there were ways to swap tokens in DPI to interest accumulating tokens that would be ideal. That way, we don’t split the market cap of DPI.


Rather than cex, we should try to make dpi the default defi index product for current crypto users by showing it prominently in wallet apps such as imtoken, zapperfi, Zerion and debank. Might be worthwhile to consider having it featured in dharma wallet as well. Cex has their own crypto indexes and we are fighting for their lunch so I think we should postpone that fight to round 2. But of course if we are able to be listed in coinbase or even Gemini it can be huge, I wonder how the regulations on this is looking like, since they have listed most of the assets in the DPI.


This is cool stuff

One idea I’ve been thinking about is leveraging liquidity mining rewards as affiliate fees. For example, (per a community vote), taking some % of the $INDEX currently delegated to Uniswap rewards and offering it to wallets/exchanges as a bonus for listing DPI

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I’m new to the community and it’s an excellent document to get up to speed!

I would like to add that it’s a low-margin business. Vanguard’s founder, John Bogle, emphasized that fees kill profits for investors and so Vanguard should always be the lowest-cost index fund. His book Common Sense on Mutual Funds is a masterpiece to understand the industry. Like Amazon, the flywheel is the following: low fees drive more volume that allows lowering fees again. John Bogle was constantly focused on improving his organization’s efficiency to drive fees lower. Jeff Bezos will later say: " Your margin is my opportunity". Index should probably adopt the same mindset.

IndexCoop’s products have a 95 basis points fees which, I believe, is reasonable today due to the lack of competition in the same category. Fees in CEX’s ETF are lower but I don’t consider them direct competition today. It’s likely that Index will have to constantly lower its fees to stay competitive in the market. The absence of competition today allows Index to extract significant value to build up its offerings and strengthen its competitive moats. Tomorrow, it will be essential to lower fees progressively to consolidate the market’s domination. It’s the same with Uniswap that lowered its fees to stay competitive. Obviously, they keep making more money thanks to the higher volume.