**[Under Revision]** - Creation of Polygon 10 Index (P10)

[jcooper]

Great idea. Fully supportive. Looking forward to making this real !!!

[Akku6567]

Aavegotchi is an ground-breaking Defi-NFT combined collectibles game. Its gameplay mechanism allows users yield farm while enjoying the play-to-earn NFT game. Just few months old but already has achieved big success so far. Aavegotchi is going to be bigger since more excited gameplay unlocked ahead. In future, your Aavegotchi is not just only an in-game character, but i could represent for your ‘status’ in virtual social network.

[Hqnam910]

I think Aavegotchi is a good projects can protect investor’s money, good liquidity in crypto market

[ptdungqb]

Aavegotchi is a number one on Defi-NFT field game. You can play to earn by many different ways. Aavegotchi Teams very smart to create many feature help user earn money. I love Aavegotchi

[TM06TM06]

Two reason for the best of Aavegotchi:

*First, it is runing on Polygon, the best layer 2 at the moment
**Second, I follow them and understand they forcusing to build the foundation from game play, social network very carefully.

[kdfdzzz]

Aavegotchi is a breakthrough project since it created a huge community where people can benefit and have fun at the same time. The $GHST itself has proven to be a reliable crypto coin worth of investing. I do believe in the future of Aavegotchi!

[0xjbourne]

The goal is also not to include the projects we already have in our existing products as we are also trying to build liquidity with all our existing products on Polygon as well.

This makes sense from Index’s perspective, but I’m not sure this is user/customer friendly. A lot of people invest in index-like products to get thematic exposure (e.g. DeFi, Metaverse, or Genomics with the ARKG ETF) and if we believe this, shouldn’t we be presenting them the best exposure to that theme, even if it is duplicative from Index’s perspective?

I suggest we discuss a general Coop-wide tenet around this.

[hoang131313]

I strongly support the aavegotchi project. Aavegotchi is not simply a blockchain game. It is a combination of both defi and blockchain game. backed by aave, a big boy in the lending protocol field. Besides, a strong, cohesive and creative community is also a very strong point for this project. Of course, the project development team is also an extremely strong and experienced team.

[Lavi]

Hey @AsifKhan and @Mringz, thanks for this proposal, this is a great product and I’m 100% in support of this! I’m a big fan of the fee split proposal, using the fees for ecosystem development is a great idea!
However, I share this concern with @allan.g regarding security audits.

@allan.g

Of the 10 proposed tokens, how many have not had independent security audits performed and published?

I think this inclusion criteria should be applied thoroughly and it would be great to have this question resolved before DG1.
FYI: from a quick look at DeFi safety I can see that at least Quickswap does not fulfill this criteria, they have no audits (one could argue that a pure fork of Uni V2 does not need to be audited, however, only 26% overall score is pretty bad).

[BigSky7]

Everything about this is awesome. I love how the fee split will power further development of Index Coop / Token Sets on Polygon. In my mind, this is the exact kind of index we need to be pursuing.

Great work @Mringz and @oneski22. Both have been speaking with the Polygon team for several months and it is great to see those conversations starting to pay dividends. In early June we had ZERO relationships with any of the major L2s or sidechains. And TBH we really didn’t have a strong plan around layer scaling for IC. Mike and David did an awesome job of taking ownership of that problem and building deep relationships with key partners.

Great to see some of these long-term BD relationships starting to pay off!

[Mringz]

Hey, Lavi. Thanks for bringing this up. Definately something will look at. I did review the QS score it seems the score is low because of poor documentation. I will speak with the QS team on improving this aspect. Quickswap are the biggest DEX on polygon, have the most users and strongly supported by the polygon foundation.

Will also be doing a deeper dive into security and liquidity of the projects. Your feedback is valuable for getting this right, so much appreciated.

[Mringz]

@Mringz

Hey, @bakamoto @catjam you both make a good points. I will definitely review what you are thinking and see what can be done. A couple of things in my mind when I think about this. When we launch this Index we do want it to be natively launched on Polygon through Set Protocol so all the liquidity will have to come from that eco-system. So I will have to see if sufficient liquidity is available to make the inclusions you mentioned. Also will have to reduce the allocation cap to 10%-15% and increase the number of projects as the intention is to include more polygon projects and projects that are expanding to polygon. I will look at AAVE, SUSHI & BAL. I am welcome to any more suggestions on that front as well.

Flagging this response.

[granddaddycool]

Great proposal.

Why cap it at only 10 tokens? As the Polygon space grows, shouldn’t there be room for this index to grow with it?

[scaleweb3]

I’m not a fan of this specific Polygon Index as I (among other things)

• would not want to buy it (aka don’t see much demand today)
• don’t think this represents the Polygon ecosystem well
• don’t think circulating marketcap is a good proxy for relatively new launched projects
• don’t like that projects with significant traction are excluded (Bal, Sushi, etc.) while relatively unknown projects are included
• miss MATIC - essential in a Polygon Index

Despite that, I’d be in favor of launching it soon and iteratively improving it over the following months. I believe the next 5 months are a good time to get to market with a v.01 index fund for various blockchain ecosystems to conquer market, mind share & ecosystem potential with a “simple product”.

As I am supporting various blockchain ecosystems myself and see tremendous potential in launching blockchain index funds at the beginning of (DeFi) ecosystem developments in cooperation with the few quality projects, I’d suggest including the following criteria as soon as possible &or adjust Indexs over time (on top of other requirements such as liquidity):

• Marketcap
• % Floating Supply
• Maturity (Decentralization, Security, Tooling)
• Ecosystem (Support) & Community
• Usage
• Value Accrual

The following blockchain ecosystem indexs are very interesting for the Coop in my opinion:

• Layer 1 Blockchains (25% ETH, 20% BTC, 10% SOL, 5% ATOM, KSM, DOT, BNB, NEAR, AVA, FLOW, ADA, TZS)
• Example: SOL/Near/etc. - accrue value from usage of the network (30% Layer 1, 25% top 3 DEXs, 15% top 3 Lending projects, (Algo Stable Gov Token), 30% Top Asset Management/Derivatives/Frontend/Staking/Dapps
• Example: Dot/KSM - accrue value from usage/parachain leases (30% Layer 1, 25% Top 3 Substrate Chains, 20% Top 4-8 Susbstrate Chains, 25% App-specific chains, Top Dex, Lending, Dapps on top of chains…

*approx. % weighting based mostly on quantitative data

Slightly Off-topic Questions:
Is liquidity on Ethereum a requirement in the next half year? Or would it also be possible to create an index fund for SOL on Solana or for DOT on Polkadot. I am quite confident most layer 1s such as DOT & SOL would be willing to provide enough liquidity on Ethereum if they were included in a flagship Layer 1 Index with potential size of 10B+ USD liquidity. For an Polkadot/Solana ecosystem index, I expect a native token to be a requirement.

[oneski22]

@scaleweb3

Slightly Off-topic Questions:
Is liquidity on Ethereum a requirement in the next half year? Or would it also be possible to create an index fund for SOL on Solana or for DOT on Polkadot. I am quite confident most layer 1s such as DOT & SOL would be willing to provide enough liquidity on Ethereum if they were included in a flagship Layer 1 Index with potential size of 10B+ USD liquidity. For an Polkadot/Solana ecosystem index, I expect a native token to be a requirement.

Hi @scaleweb3 presently the TokenSets infrastructure is only deployed on Polygon and Ethereum Mainnet.
Our technology right now only allows for indexes created on those chains to access tokens with liquidity on those chains.

[DeFi_King]

I am 100% in support of this proposal. UniLend Finance is a project I have been following since its inception and their vision to revolutionize DeFi industry is beyond anything I have experienced. Not only they have a strong motivation but also a powerful team, which includes Chandresh Aharwar, ex-matic team.

UniLend has been covered by major media houses like coindesk and CryptoBriefing.

UniLend’s smart contracts were audited by Certik, detailed info of which can be found below.

Here are the relevant links for a deeper diver into UniLend.

Dapp - https://app.unilend.finance/
Audit- https://unilend.finance/docs/unilend_flashloan_audit_report.pdf

UniLend is a comprehensive permissionless DeFi protocol. Whereas other DeFi protocols support only a limited number of assets, anyone can list any asset on UniLend’s supported blockchains (currently Ethereum and Polygon) to access comprehensive DeFi functionality for those assets. This includes decentralized trading, lending/borrowing, and the industry’s most cost-effective flash loans.

[takeeacy]

In terms of considering other projects that are deemed high quality and TVL but not specifically native to Polygon, I think you should also check out Curve, CREAM, Harvest, Kyber, Instadapp, BarnBridge, Set Protocol, 1 inch, and Pickle Finance (in addition to the great mentions with Aave, Sushi, and Balancer). All of these exist on DeFiPulse Index already and have been ported to Polygon, so they’re vetted to some degree at least in Ethereum land. I know this would differentiate it less from the DPI product, but if we were to go down this route with all projects in Polygon, you could also add these to the comparison list. Perhaps it would be better to show the versions of the indices (Polygon native projects only vs the expanded list of all projects on Polygon) and put it to a vote?

A Polygon index product seems necessary either way. As a yield farmer on Polygon, I personally like the product with the expanded list even if it becomes more similar to a DPI on Polygon (but with Polygon levels of liquidity). A lot of the Ethereum to Matic ported projects have a longer track record of safety and utility; that appeals to me much more.

One additional consideration is that the cost to front run on Polygon network should be way lower than Ethereum (since gas is so much cheaper) , so I think efforts to prevent front running of the index should be taken more seriously than usual. What are the strategies (if any) used to prevent this are being considered? I also understand if it’s safer to not disclose those strategies in case if front-runners were reading this thread. One simple strategy is to reconstitute on a randomized day. Not sure how hard it is to do in Solidity, but in Python, it would be simple to programmatically choose the rebalance day at every 30 days +/- a random number of days between 1-7 for example. This introduces some risk in trying to time the front running trade before the index.

[Mringz]

We will be revising the Methodology and projects included based on the initial feedback. Thank you for your feedback everyone. It is super valuable and make assist in making this index extremely successful.

[Polyhands1]

Amazing, when will see the new proposal and be able to vote?

[Polyhands1]

I would also support a liquidity mining incentive with Polygon putting up MATIC for this index.