Work Team: @Metfanmike , @DocHabanero , @Abel , and myself
Summary: @Llama have proposed $LDI (IIP-60: DG2 - Llama Diversified Index $LDI) , a productive diversified crypto index that is optimised for volatility based performance.
$LDI scored a 1.76 in Work Team Analysis. This is a few points above SYI, a previous version of PAY (1.74) which did not move forward after DG2, and a few points below MVI (1.92), which was previously launched. The proposal demonstrates a depth of thought around the composition of the Index, liquidity strategy, and technical work required for development.
Link to full analysis: LDI_Product Scoring Chart
Reference for scoring methodology: Revised Product Prioritization Framework
Full scoring analysis:
Benefits
Market Opportunity: 3.5
$LDI picked up a point for a nice-to-have product, as the team noted it would be fee- and effort-intensive to pick up such a large volume of tokens as an individual investor. It also scored a point for being a differentiated product based on that wide composition. The team was dubious about whether it should earn a point for “large market”. In the market opportunity section, Llama notes that it has a network within universities who may be interested in purchasing this product, though in conversation noted that it was unlikely to see short or medium term adoption given the legal ramifications of productive products. Additionally, we had some concerns about the market size for a product primarily targeted towards DAOs. The $6B treasury figure is widely promoted and indicative of the growth potential of this market, but lacks depth behind metrics to indicate short-term success: % of those treasuries currently locked vs available, and capability and willingness for DAOs to diversify their treasuries. We’ve rarely seen diversification efforts (excepting stablecoin diversification) surpass 5% of the treasury (e.g. FEI or BadgerDAO). Finally, the product did not score a point for “must-have” as investors may be more drawn to wider and more customizable levels of exposure to some of the individual themes within the product. `
Revenue Structure: 4
The revenue structure proposed is 60/40 post-gas split with a streaming fee of 135 bps, which rates as a 4 (typical of products without mint/redeem fees.) We noted that using the intrinsic productivity components to generate product revenue could grant it a higher score, though that doesn’t seem to be in scope currently.
Methodologist Impact: 3.25
Llama did not pick up a point for marketing plans, as none were detailed in the forum post. Most members of the work team did not grant it a point for reputation given that it has a relatively small Twitter following (under 4k) and a moderate number of active partnerships (7). Llama also noted in the community call that it is a smaller DAO with 20-25 community members (though they’ve grown to 35 since that call.)
Costs
It’s worth noting that costs are factored into the rubric such that a lower score results in the product being ranked more highly.
Financial: 3
The product earned one baseline point and 2 points for requiring Index Coop to provide incentives. The methodologists plan to provide seed liquidity.
Operational: 1.75
The product earned one baseline point and one point each among most members of the team for requiring regular liquidity mining operations. It is unclear exactly how often the product will be rebalanced as Llama notes it will respond to “market conditions” in addition to quarterly rebalances.
Technical: 3
The productive components of this product introduce some complexity to launch.