Or some more random thoughts for @overanalyser
The Secret Master plan proposes a target of getting a single set (DPI) to $50 M AUM.
I don’t like this goal, it sets an arbitrary value while ignoring the wider market valuation, something that we have little influence over.
So, I would like to propose a new Target: 1%
Doesn’t sound very ambitious does it?
OK, how about: INDEX coop $DPI will sustainably control 1% of the market
So, $DPI will control 1% of the circulating tokens that make up DPI, so:
- 300 TFI,
- 10,000,000 UNI,
- 10,000 MKR etc.
- And I want to do it without needing liquidity mining to maintain the 1% share AUM.
At the moment, DPI is ~$13M and is ~ 0.3% of the available Market cap. If you look at Etherscan, you can see 99 SYFI sitting there with all their DeFI friends.
For comparison, in 2017 Vanguard manged 6% of the S&P 500.
Why do I say without liquidity mining to maintain it? Because Liquidity mining is borrowing from our future to build our reputation and AUM. This in unsustainable if we keep going we are out of INDEX by Christmas 2021. The current INDEX mining is issuing 15,000 INDEX per day, ~ $45,000 per day.
So we need to generate cash flow and build with that. $50 M AUM at 0.95% streaming fee is $475 k pa, or $1,300 per day. If we have all 10 M $INDEX in circulation, that is $0.05 per INDEX per year…
So, my suggestion for a road map:
0 to 0.1% (Sustainable) - Completed by Set Labs in September
- Launch DPI
- Launch $INDEX
- Launch Website / discord / discourse
0.1 to 0.5 % (Unsustainable - supported by INDEX inflation) - We are here for another 50 days
- Build a community (inc. memes?)
- Create an ecosystem (new website?, reference documents?, customer guides?)
- Think about our vision
- Identify key customers groups / partners / stakeholders
- Build bridges with other protocols and exchanges
- Build a treasury (currently $340 per day income…)
- Minimise expenditure ($INDEX and treasury)
- Consider long term LP incentives (can we divert treasury to Uniwasp pool to incentivise LPs?)
- Experiment with new revenue streams (50% of the current 99 YFI staked in Yearn governance would yield ~$200 per day)
- Delegate some of our governance rights in other protocol to trusted parties (build trust with the DeFi protocols within DPI)
- Think about future index launches - burn resources (Time and $INDEX) to launch more Sets quickly, or focus on $DPI growth
- Do we taper off the $INDEX rewards for LP’s and let them drift away as farming yields taper?
- We could increase the streaming fee to generate more income, 90% of DPI are being farmed, so they will likely be insensitive to a 2% fee. However, we hurt long term holders who don’t farm (a key long term customer)
- Establish a track record of securing high AUM.
0.1 to 0.5 % (no INDEX issuance / inflation - “Winter is coming”) - Mid December 2020 until ?
- Weather the shock of $DPI AUM cliff when liquidity mining stops.
- Try to live off treasury fees (likely <300 / day streaming fees)
- Experiment with LP incentives
- Experiment with new revenue streams - more staking, yVaults, cTokens, aTokens
- Experiment with holder incentives (can we reduce streaming fees to 0, and survive off other income? How good would a 1% annual rebate for all $DPI holders be as a marketing tool "Buy $DPI and your holding will grow with no effort".
- Build our community and network effects - get $DPI built into others protocols.
- Start using our governance tokens held in the DPI to collaborate and grow the protocols within $DPI. (0.5% of circulating YFI can help build a relationship to get a yDPI vault, similar with MakerDOA.)
0.5 to 1.0 % (Sustainable growth) - ? to ??
- This is when we start to start seeing the results of our work during the winter - Growth without INDEX insurance - we are living from our fees.
- Build our community and network
- Consider INDEX treasury - do we need mint keys, do we need un-issued $INDEX?
- Consider tokenomics - staking to reward long term holders / pull INDEX off exchanges, or buyback and burn?
1.0% DeFi AUM without INDEX issuance ???
- Party all over Social Media
- "Release the Memes"
- Roadmap for 10%…
- Allocate a fraction treasure to public goods -(gitcoin grants matching funds)
We have a fantastic start with $DPI as a launched product and community visibility. We need to form a vision, and then build it.
Personally, I think a index should be simple, reliable, and low cost for users to buy and hold. We INDEX / DPI should be something everyone knows and uses personally and within their protocols.
But this is just my thoughts as a massive brain dump 7 days after INDEX was launched.
How do you think we become the 1%?