The $INDEX Flywheel

Governance Tokenomics
24

If INDEX has value, it keeps the $1.8m and counting warchest robust, and the treasury would be able to collect the EXACT SAME streaming fees that you are fretting over keeping in the treasury.

If INDEX doesn’t have value, the $1.8m and falling continues to lose value even as it is emitted more INDEX, but yes, you’d have 100% of $15k a month in the treasury to pay all those expenses.

Missing the forest for the trees, I think.

1 Like
25

Re: use of proceeds, the Index Coop can be thought of as a business. It will receive inflows of capital through various sources, and the community can decide what to do with that capital.

Traditional businesses will either:

  • Reinvest capital in growth: This is typically done in early stage businesses to maximize growth. Paying for developers, marketers, and other service providers represent ways to reinvest in growth
  • Pay out dividends: When a traditional business is cash-flow generating, it may decide to pay out a yield to equity holders. Sometimes this is misconstrued with paying for services, in which risk baskstop is considered a service that the Coop needs to provide compensation for.
  • Buy-back: An alternative to dividends, buy-backs reduce the circulating supply of the token. In crypto, this has typically been utilized by the likes of BNB, MKR, etc.

Currently Index Coop can be categorized as early stage and reinvesting capital in growth seems to be the most sensible path. There is so much more to do, and the community will get excited about $INDEX if it has good future prospects and reinvests (like Amazon) vs. whether it can manage the treasury for the benefit of existing holders.

5 Likes
26

Not sure if I’ve missed any developments here but LemonadeAlpha is asking a very simple question.

Describe the tokenomics of INDEX. Do holders earn a portion of management fees? If not, what do they earn? If they don’t earn anything no one buys the token except dumb speculative money not knowing what they’re buying into. Overtime, the pool of this dumb money always decreases and token value drifts down.

Look at CVP, at least there is a clear path to rewarding token holders which is that token holders earn by staking portfolio constituents in governance. So PIPT would be used to earn stkAAVE etc but with rewards only going to CVP holders.

I see none of that here in INDEX.