IIP: 162

Title: Season 2 - Network Budget Approvals

Status: Queued for Snapshot

Author(s): @ElliottWatts and Index Council (@catjam @anthonyb.eth @DevOnDeFi @edwardk @afromac)

Created on: 21st July 2022

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Budget Overview

This IIP is to approve the budgeting for Season 2 (July 1st to December 31st) operations of the Index Coop. You will notice we are moving to 6 month seasons, we see little to no point in running 5 month seasons with an ‘off-season month’.

The Index Coop has been through a significant restructure with long standing members of the community departing, we are adopting a leaner organizational structure whilst we navigate through challenging bear market conditions, hoping to come out the other side a stronger more successful business. Given the gravity of the proposal, we feel it appropriate to take this through IIP, cementing the leaner organizational changes implemented by the Index Council. The budget has been prepared by Finance Nest taking into account the views of the Index Council, Investors and Contributors. We feel this has made significant strides to address the concerns raised in the open letter.

TLDR

• Annualized S2 budget is $4.12m
• Complete reduction in flexible rewards. We are now budgeting for $77.7k total for the season across all networks. Representing a reduction of 88% from S1 actuals.
• Total budgeted for S2 is down 32.86% from S1 actuals on an annual basis
• New focus on Growth and Product with Service Network being reduced significantly for S2
• Monthly Opex excluding flexible contributor rewards totals $15k down from $49.6k.

Operations Account: ‘0xFafd604d1CC8b6B3B6CC859cF80Fd902972371C1’

Investment Account: ‘0x462A63D4405A6462b157341A78Fd1baBfD3F8065’

Treasury Account: ‘0x9467cfADC9DE245010dF95Ec6a585A506A8ad5FC’

Details

The Season 2 budget being requested is $2,059,960 for a 6 month period. This is equivalent to $343,326.67 per month. The funding will be provided from the investment account to the Operations Account once the Investment positions have been unwound to an appropriate level as determined by ICC and Investors. Note we have not requested INDEX from the treasury since all opex costs will be funded from stablecoin assets. The assets will be distributed/managed by Finance Nest.

The detailed budget spreadsheet can be found here.

Do note that DSM costs are not included as part of this budget. They were approved via a separate IIP and form part of the equity package for contributors.

Build Network Overview

The goal of the Build Network for S2 is to deliver the core products that we see direct demand for in the market, while also continuing to innovate and experiment in a leaner and more efficient manner. In parallel we will continue to develop and work with new tools, infrastructure, infrastructure providers and partners that will enable us to solve the challenges around product rebalancing and protocol owned liquidity (POL) that have obstructed us from launching composite products.

The main change from S1 is that the product roadmap will be co-owned by Build & Growth, and will be tailored to meet the specific needs of high value market segments that we identify and interview.

Growth Network Overview

Growth Network will mainly work to co-underwrite the Product Roadmap with Build nest, seek to maintain and grow TVL in a Bear Market, while cautiously testing a few new product-growth or growth strategies.

The main changes from S1 are reduced flexible contributor costs, a smaller more focused team, and leaning into our Marketing and Partnerships nests, supported by Community. We aim to learn about the traction of new products with our onchain audience, while also scaling the distribution of our products via offchain distribution partners - primarily intermediaries.

The main challenges we foresee are macroeconomic, crypto sector sentiment, and potential for a prolonged Bear Market - the last major Bear Market lasted over two years.

Service Network Overview

The Service networks mission is to provide support to Build and Product networks whilst also providing transparency of operations for Investors and stakeholders in the organisation. This will be accomplished by providing financial and operational support to the organisation ensuring Build and Growth teams can focus on building a robust business for years to come. We will be responsible for the sustainability of the organisation, financial transparency and treasury management.

Vote

Approve budget for S2

Reject budget - we need further discussion.