Hey Yearn community,
I’m from Index Coop, a collective aimed at creating and maintaining the best crypto indices on the market. You may have heard about our first product the DeFi Pulse Index ($DPI) which was launched under two months ago and currently holds ~0.5% of the supply for tokens in the index. This makes us the 14th biggest holder of YFI and top holders of other major DeFi protocols. You can learn more about us on our site indexcoop.com
In our governance portal, we are currently trying to figure out what to do with all these idle tokens. The two main things we are interested in are effectively utilizing governance tokens and getting yields from tokens both of which the Yearn community has a lot of experience in so I figured we should ask you guys since you’re the experts. This forum post sums up most of our discussions so far.
Basically what it all comes down to is running some kind of system like a Yearn vault and managing the associated risks and tradeoffs, both financially and reputationally. The risks of yield are antithetical to the concept of a stable, boring index product and reduces our governance power which we should be leveraging for growth. Leaving the tokens idle also prevents us from exercising governance in the case of Yearn or reducing inflation of SNX.
In my opinion the ideal scenario is there is an actual yDPI vault run by Yearn so Index Coop can focus on our index products. Index is slow, long-term, macro focused and Yearn is fast, short-term, micro focused. Index Coop gets yield from Yearn, and Yearn gets a large, reliable supply of assets from Index Coop. All is right in the world. One of your members has already proposed as much. But that’s not possible yet since 1. DPI can’t be used yet as collateral on any platforms for delegated vaults and 2. Even if you redeemed DPI for the underlying tokens, there aren’t any vaults for them besides yYFI. So we are left with either leaving these tokens idle or building our own yield generating system which is competitive to Yearn.
Do you guys have any advice/opinions on what we should do? Do we use the governance tokens as best we can with our current system like Yearn does with CRV tokens? Do we wait on building a yield system for DPI until Yearn supports us as an asset? How do we properly evaluate the risk/reward of our yield system if we do build it?
Just like we are asking a lot of questions you guys have figured out already. you guys are asking the same questions we have answered already. Let’s build together
Thanks for your help
I’m a big Yearn supporter and smol YFI holder