Title: Prioritize INDEX tokens for bond approval for widespread DeFi bluechip meta-governance power
DEPARTMENT or DAO: Growth
Draft Proposal Link: https://near-diploma-a92.notion.site/LOBI-Bonds-f94591801e514378afebd8ec09db5ea1
PROPOSAL: Prioritize Index Coop's governance token INDEX for bonding to use for meta-governance in various DeFi protocols through their DPI holdings
PURPOSE AND VISION: Acquire 110k INDEX tokens with the goal to reach quorum on Index Coop meta-gov proposals to control $150m of Defi bluechip governance power. This will make LOBI the biggest voter on top DeFi platforms like UNI, AAVE, and COMP (details below).
IMPACT: $150m of governance power purchased for 1/100th (110,000 INDEX) of market price. Acquisition of heavily undervalued asset into treasury.
Index Coop (IC) makes crypto ETFs, including DeFi Pulse Index (DPI) the biggest in the market with ~$150m in TVL. IC indexes are fully backed and redeemable meaning IC is responsible for custody of all assets for their index investors. This has led to them controlling nearly 1% of circulating supply for major DeFi DAOs. In order to streamline the process for voting on proposals with DPI they created a MetaGovernance Committee (MGC) that’s responsible for deciding votes if quorum isn’t met and executing votes once a decision has been made by INDEX voters or the MGC itself. If LobisHQ is able to seize a medium-large position, quorum’s would be met, further enabling & proving the ability of LobisHQ to fairly decentralize a larger protocol’s governance, while gaining massive strategic value, at great price/leverage. If passed, Lobis will also as a by-product start to be backed by AAVE, UNI, Compound, Maker, Sushi, Yearn, Synthetic and Rari tokens, by extension of the IC and DPI synergy. Additionally IC has significant governance power across DeFi to bootstrap LOBI’s power & value during this initial phase.
Index Coop (IC) makes crypto ETFs, including DeFi Pulse Index (DPI) the biggest in the market with ~$150m in TVL. Their indexes are fully backed and redeemable meaning IC is responsible for custodying all assets for their index investors. This has led to them controlling nearly 1% of circulating supply for major DeFi DAOs. The great thing about buying INDEX is they accumulate governance power for us by growing their products. E.g. they are adding ENS to the Data Economy Index (my product with them) so LOBI automatically gets exposure to ENS governance without having to issue more bonds.
$1 of INDEX buys $4 of bluechip DeFi governance power (DPI mcap / INDEX mcap) making efficiency of buying INDEX better than any other token (including CVX, currently at $1.1 / $1).
We call this leveraged meta-governance. Since quorum is rarely met for Index Coop meta-gov votes, LOBI should seek to acquire 110,000 INDEX tokens (5% of circulating supply, worth $1.8m currently) in order to ensure all meta-gov votes pass. This means LOBI can control $150m of governance power with only $1.8m of investment. 100x leverage! IC is one of the biggest voters for UNI, AAVE, COMP, and YFI so acquiring INDEX expands LOBIs reach and power base. They are in the process of passing a new product with Bankless that will include CVX, gOHM, TOKE, SPELL, etc. so we will be purchasing those tokens at a discount, more efficient than any other protocol with similar intentions to LOBI.
IC also controls enough AAVE and UNI (and COMP?) to create their own proposals on these protocols which is critical to help integrate LOBI and OHM tokens into the DeFi ecosystem. FEI already bought 100k INDEX for meta-gov purposes. They used this to get FEI listed on AAVE using Index Coop meta-governance .
In order to streamline the process for voting on proposals with DPI they created a MetaGovernance Committee (MGC) that’s responsible for deciding votes if quorum isn’t met and executing votes once a decision has been made by INDEX voters or the MGC itself. If LobisHQ is able to seize a medium-large position, quorum’s would be met, further enabling & proving the ability of LobisHQ to fairly decentralize a larger protocol’s governance, while gaining strategic value. If passed, Lobis will in effect start to be backed by AAVE, UNI, Compound, Maker, Sushi, Yearn, Synthetix, Rari, ENS, and many more tokens, by extension of the IC and DPI synergy
I was the original proposer of the MGC and have sat on the committee since it began, I love meta-governance and am very excited to be contributing at LOBI. There is clear alignment between LOBI’s goals and the MGC’s functional role. LOBI would actually be alleviating some of the disagreements about MGC in the first place that it “disenfranchises” INDEX holders by delegating to a team when quorum fails. Since LOBI would be helping quorum be met they would be giving more power to other INDEX holders in meta-gov decision making (inline with our mission to give power to small holders.) Additionally IC has significant governance power across DeFi to bootstrap LOBI’s power during this initial phase.
On INDEX Liquidity
There is very low liquidity for the INDEX token and is susceptible to large price movements. INDEX is quite literally a valueless governance token with no staking or value accrual to token holders which explains the low liquidity. Its only use case is governance in IC directly and metagovernance in other protocols, a perfect candidate for LOB I. so we should take a staged approach to acquiring the full 110,000 INDEX we need. I suggest we start with bonding INDEX immediately and see how that goes. @kiba can bond a significant portion of index from personal funds he already has. The Index Coop treasury is going to provide liquidity for INDEX/ETH so we can increase bond size once that happens (ETA unknown but it’s recently approved by governance). Also worth noting that Index Coop might approve an INDEX buyback program when their token is undervalued so this opportunity might not last long.
Alternatively we could bond INDEX/ETH LP tokens but that cuts our $/vote in half, still >$1 but less efficient, which will help us bond more INDEX in the future.
I’m new to OHM world so still learning about bonding process so sorry for lacking/false details here.
Lobis Finance dashboard would need the INDEX RFV added, even the underlying tokens it represents (1 aave, 1 comp, 1 rgt per index, x index per 1 lobis)
- Acquire 20,000 INDEX tokens via bonding
- Start bonding process ASAP
- Since INDEX votes happen on Snapshot LOBI would have to delegate to an EOA to execute whatever LOBI voters vote on in INDEX Snapshot.
- LOBIers would vote on LOBI Snapshot. The MGC would use INDEX Snapshot results (assuming quorum is met) to execute onchain or snapshot vote.
- LOBI ops can either pull votes from individual DAOs or track INDEX Snapshot for meta-gov proposals and copy them over to LOBI Snapshot. Index Coop meta-gov votes end 24hrs before the actual DAO vote ends so LOBI should end 48hrs before the DAO vote ends to allow time for vote to be submitted to Index Coop.
- im thinking here ^, as a metagov proposal is duplicated into IC, the IC snapshot is duplicated into Lobis snapshot, maybe ending 1 hour before the IC snapshot ends, and pass the leading decision up into IC. If Lobis is proposing upwards, they create initial proposal with some sort of [IC-AAVE] tag for example within lobis gov, if quorem/consenus is hit it advances to creating proposal on IC snapshot?
- IC will still be responsible for actually executing votes that INDEX holders want. So LOBI just has to vote on INDEX Snapshot and the MGC takes care of everything else for us.
ROADMAP AND TIMELINE:
WHEN: Expedited Proposal Timeline (worth noting that Index Coop might approve an INDEX buyback program when their token is undervalued ((now)) so to leverage this opportunity we must act accordingly)
12.18.2021: INDEX bond discussion finalized
12.20.2021: LIP-6 passes on Snapshot
12.14.2021: First INDEX bonding round starts
01.08.2022: Second INDEX bonding round starts
Ideally done accooomulating by end of January 2022
- $ voting power per $1 of INDEX
- % of INDEX needed for meta-gov quorum