Work Team Analysis for $PAY and $PINT

Work Team: @DocHabanero , @Abel , and myself

Summary: DeFi Pulse (@ChrisG) and @Matthew_Graham have proposed $PAY and $PINT, two composite indexes aiming to to capture the best risk adjusted yield on USD stablecoins within DeFi. The low-risk and medium-risk tranches are $PINT (Pulse INTerest Index) and the higher-risk tranch is $PAY (Pulse Aggregate Yield Index)

$PAY and $PINT were scored together and earned a score of 2.04. This is slightly above ETH-2xFLI-P (2.03) and slightly below DPI (2.13) and LINK-2x-FLI (2.08). These similarly-scored products have all passed DG2 and all except LINK (technical constraints) are live in the market. The PAY & PINT proposal has undergone significant review, research, and renegotiation during the last several months!

Link to full analysis: PAY_Use_Product Scoring Chart

Reference for scoring methodology: Revised Product Prioritization Framework 2

Benefits

Market Opportunity: 4.33

This section is the most impactful towards the overall work team score, and $PAY scored well at 4.33! The product picked up points for a nice to have and need to have customer need, as well as a differentiated product. The team was split on whether this catered to a truly large market. Selling into DAOs is key to success for this product, but as we’ve evaluated other products geared towards this audience (e.g. LDI) we’ve observed that it’s still an unproven market. There are currently limited sales avenues and varying abilities to buy the product based on treasury capabilities (% unlocked vs locked) and DAO management capabilities.

Revenue Structure: 2.67

This was an unusual scoring section, as we combined the potential of the two products under the $PAY umbrella ($PAY and $PINT). $PINT has a 35 bps streaming fee and $PAY has a 95 bps streaming fee, both at a 60/40 post gas split. The lower streaming fees indicated a lower score for this section, though the ability to package or upsell using the product combination is an interesting approach!

Methodologist Impact: 3.33

This is consistent with the recent Work Team Analysis scores for other products where DeFi Pulse is the methodologist. They scored a point for product competency and a methodology that has undergone rigorous review and feedback. The methodologist did not score a point for marketing support or brand reputation.

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: 2

The product earned one baseline point and 1 point for splitting the seed liquidity costs between DFP and Index Coop.

Operational: 1

The product earned one baseline point only, as it aims to only rebalance 2x year and does not require incentives. That said, it’s noted that this product likely requires a different sales avenue that our other retail-focused products due to its focus on DAO sales, which may present future operational overhead for IC. It may also require different growth & marketing tactics as our current efforts are not aimed at DAOs.

Technical: 3

The team has undergone a significant compromise and review process for MVP over the past few months, which has resulted in a lower technical score than previously anticipated. Launching with a combination of the $PINT product at 3-5% yield followed by $PAY at 12% yield helps us continuously deliver great products while not overburdening our technical teams.

Note on Work Team Analysis:

  • This is intended to help members who haven’t closely followed $PAY product discussions learn about the strengths and opportunities of this product. It’s also designed to help methodologists uncover strengths and opportunities in their proposals.
  • Work Team analysis can never accurately predict the future, or how successful a product will be in the months/years after launch. What it does communicate is how much risk the Coop is taking on by launching a product, and a perspective on the strengths/opportunities as stated above.
  • Work Team analysis is completed by each of the members individually scoring the product, discussing their scores, and aggregating results. The final score is an average of the individual scores.
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