Greetings PUBLISH0X community, I wish you all a happy new year! The first article of 2021 is based on Autonomous Asset Manager INDEX COOP. We will see the basics and the innovations of the INDEX COOP one by one. So please take a seat and start reading.
Starting from early summer in 2020, DeFi projects begun to settle on the top chair of the crypto assets world. The most basic structure that is built on is AMM (Autonomous Market Maker) feature. We can basically define it as a pool created by self encouraged community members all over the world. In the past half of 2020, they dominate the market with any kind of incentives, airdrops, liquidity minings and etc... The main aim is to bring everyone into the action but every single project wanted to realize it by themselves. So the result is frustration, of course.
In every article I wrote, there is always a problem to solve and a possible solution. Specifically for that one, the problem is diversification of the DeFi projects into multiple columns rather than unifying the power and resources. Because of that, newbies face multiple challenges to involve while the early adopters can’t deliver the needs of a transforming world. If we sum up all those problems into one, we need an Autonomous Asset Manager/AAM to reach the easiest and the most primitive solution. It is INDEX COOP. Read on to see the details…
What is INDEX COOP, briefly?
Index Coop or Index Cooperative is a community-owned project to launch and maintain the world’s best crypto index vehicles. The index demonstrates the collaborative crypto assets, mainly focused on DeFi governance tokens, to both hedge your risk and to provide easier access to multiple DeFi organizations at the same time. The very first example of such an index is DeFi Pulse Index (DPI) which is initiated by 2 sector leaders, DeFi Pulse and Set Labs respectively. DPI shows 10 different DeFi tokens in a single token mechanic and lets us invest multiple assets in 1 transaction. The fee coverage and lower risk-taking are only some benefits of holding DPI.
In traditional finance, people eager to choose some companies to invest their hard-earned money to build a brighter future for themselves. The most commonly traded assets such as Gold, Silver, and some stocks are added into these companies’ indexes. So the investors benefit from more stable profit and lowering risk by diversifying their portfolios. BlackRock and the Vanguard Group are only 2 examples that manage more than 5 trillion dollars at the time of writing.
Now, we have a similar opportunity to invest an index to stabilize earnings. The first example is the DPI. DPI consists of 10 different assets: $SNX, $UNI, $AAVE, $MKR, $YFI, $COMP, $REN, $LRC, $KNC, and $BAL. They all have different percentages of allocations in index pricing as shown below.
As you can see, the price of the $DPI token is 116.77$ at the time of writing. And it increased by more than 11% last week. This is a relatively good percentage for anyone. UNI has an 18% allocation in the index so most of the 11.93% increase comes from UNI tokens. It seems better to hold only UNI, but on the other hand, YFI and KNC tokens decreased past week. Assume that you holding only these two, so you will face more than a 6% loss even for all market pumps. So the DPI provides you smaller gains in a bullish market but smaller losses in a bearish market, too. The more stable term reflects this topic.
The allocations of DPI is not constant. It can be changed over time according to the community’s needs and market structure. For example, in November 2020, there is an index rebalance. You can check the details here. The changes in the index parameters belong to the community and $INDEX holders. So the answer is yes, they have a native token called INDEX. Let’s see the tokenomics together.
The Native Token $INDEX and Tokenomics
As I wanted to explain in the above sentences, DPI is an index, not a single token. But INDEX is a real, single token built on the ERC20 chain. Total supply is set 10,000,000 INDEX and 70% of all tokens is allocated for the community while the remainings are allocated for DeFi Pulse and Set Labs teams, respectively. 2% of the total supply is for Set Labs Inc and 28% of all INDEX tokens are allocated for DeFi Pulse teams to further improve and develop that index. The remaining 70% supply will be distributed to the community in 4 ways:
- Initial Distribution to DPI Owners: 1% of total supply is distributed on the day of launch, 6th of October 2020.
- Community Treasury: 52.5% of tokens have been allocated to the treasury.
- Index Methodology Bounty: 7.5% of all tokens are allocated for the 18-month bounty program.
- Liquidity Mining Program: 9% of the total supply is for liquidity providers on different CEXs. It was initiated as a 2-month program but already prolonged 1 more month until the 7th of January, 2021. And one proposal seems to be deployed to further extend this program.
With holding $INDEX tokens, you become one of the governors. But at the same time, the INDEX COOP brings you some responsibilities to complete. Please don’t assume these as tasks, but it is necessary for a better community. Basically, we can summarize the responsibilities of $INDEX holders as follows:
- Adding Indices: INDEX holders are responsible for sourcing, developing, and supporting new index strategies that have broad market appeal.
- Controlling the Community Treasury: To attract a robust set of participants and methodologists, INDEX holders will devise incentive programs to attract and retain index methodologists, liquidity providers, marketers, community, developers, and other experts.
- Updating Fee Configurations: In the traditional financial world, index vehicles monetize through an expense ratio/management fee and/or via asset lending. To enable sustainability, the community will be responsible for finding the correct balance in deploying value accrual mechanisms.
- Enhancing Indice Performance: As components in indices can be used in governance, staked, or lent, INDEX holders, will be responsible for determining how to best allocate constituent assets for achieving the greatest yield, proper influence, or to satisfy other community-determined goals.
How Can I Use INDEX Products?
DPI/DeFi Pulse Index already gives the opportunity to everyone to track their dividing their portfolio and minimize the change with lesser risks. With over 25 million dollars worth market cap, it competes with others to become the main DeFi related asset. In addition to that, there are several options to earn $INDEX. The first one is staking Uniswap ETH/DPI tokens into the Index Farm page, the second one is leveraging these tokens on Alpha Homora, and the last one is using Moonswap to further increase your possible gain. Please check the relevant website to see the details.
There is an extra opportunity for artists! If you are an NFT creator, you can grab up to $800 in INDEX tokens for creating the most attractive NFT arts. If you want to participate with your unique NFTs, please be quick to take action. The last submission date is the 4th of January, 2020.
Don’t forget to join the Discord channel to contribute to the community. Also, there is a Twitter account to follow to become up to date. Instead of all social media accounts, please subscribe to the newsletter to get weekly news of Index Coop.
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