Roadmap Update

With the arrival of a new Head of Product in Q4 and a sharper focus on leverage and yield products in 2024, this is an ideal moment to share an update with INDEX holders and the wider community. This update outlines Index Coop’s priorities, the roadmap for Q4 2024 and Q1 2025, and highlights ideas which didn’t make the roadmap this cycle. This article will also briefly touch on some medium and longer-term concepts that could be considered at a later date.

David Reising, former Head of Product at Exodus Wallet, joined Index Coop as Head of Product in October. Since then, he has led a prioritisation and roadmapping process in collaboration with contributors from Product, Engineering, Marketing, and Partnerships, resulting in a set of focused and ambitious priorities for the next two quarters, detailed below.

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First: The Focus for Q4 2024 (Partially Completed)

1. Deploy icUSD

The USDC yield index token the DAO has been working on with Chainlink and Circle, icUSD, is currently live in testing on Base, while an Ethereum version - enabled by Across Protocol bridging - is also being tested. The aim is to finalise these token versions in the next week or two. This build admittedly took longer than planned due to some gas efficiencies on Ethereum related to Morpho vaults, which the team encountered in the development process. These challenges have since been resolved and the reactive engineering work here will be usable for other tokens.

Note: the Base token has a higher expected APY and if the Ethereum approach is successful, it will unlock significant gas savings for Mainnet users who want to earn on their USDC.

2. Integrate icUSD

The Partnerships team has been busy on this in Q4, supported by excellent collateral from Marketing, and has secured one agreement for a CEX listing and CeFi ‘Earn’ section placement from a major CeFi partner. The team is working now to ensure a) icUSD is liquid for launch and b) another two large integration partners agree terms for a high-value integration in the core of their UX. The aim: secure deal terms with three top tier integration partners in Q4 and ideally launch integrations in Q4 too - though we’re mindful it looks like these integrations will likely go live in Q1 2025 due to integration partners having their own roadmaps and processes.

If enough positive elements to the overall growth story are in place, a marketing launch (with Chainlink and Circle assisting) could happen in Q4, but this may also be pushed to Q1 2025 if it would mean a bigger, better launch then.

3. Launch High Yield Vaults

Relaunch hyETH as a Morpho vault in partnership with Gauntlet, and potentially launch one other yield vault on Morpho as well. The Product and Partnerships teams have agreed a partnership arrangement with Gauntlet, to enable hyETH to become a more dynamically rebalancing and yield-optimising product. This initial pilot aims to pave the way for potential BTC, stablecoin and leverage products as follow-on, next steps too.

Note: hyETH PRT holders will not be affected by this change and can expect to continue to earning fees as usual.

4. Launch Bitcoin-Ether Ratio Products: BTCETH2x and ETHBTX2x

The Product team has been thinking about such tokens for some time, and with new market heat and Index Protocol infrastructure available, it is now timely and efficient to launch them. These two ratio products will be new tokens in the leverage suite and enable holders to gain 2x exposure to the BTCETH or ETHBTC ratios and the direction they move in. For example, if an individual wants exposure to the ETHBTC ratio—hoping that ETH will rise in value relative to BTC—they will be able to hold ETHBTC2x and enjoy ~2x gains in this ratio. These tokens are most likely to live on Arbitrum, but this isn’t fully locked yet.

These ratio tokens can also be considered pilots and, if they are successful, could be followed by more ratio tokens such as BTCSOL2x, SOLBTC2x, ETHSOL2x and SOLETH2x. In a warmer market, with market participants holding strong/tribal opinions about some major tokens future price trends versus others, it could be an optimal moment to launch more of these ratio tokens.

5. App UI/UX Refresh I

While the app has evolved a great deal in 2024—with a number of folks working on it full time now—there are areas to improve in Q4 to improve it and enable some major integration wins for the Partnerships team.

First, the Leverage UI needs to be evolved from its v1.X version state to a v2.0 state, with UI enhancements, PnL tracking, and improved app performance and mobile UX. In parallel with this design and build work, a deal with a major wallet has been agreed to integrate the Leverage UI into the wallet’s dApp browser. The aim is to enable this integration to go live in Q4 or Q1 2025.

Second, with icUSD soon to join hyETH and others in the yield category, it makes sense to also have an Earn section in the app. The designers have been planning and designing this, while the Partnerships team is working on another integration deal with a different major wallet to feature this section in the Earn section of their Web3 browser.

6. Build an Aerodrome Adapter

An Aerodrome adapter will be necessary for leveraged SOL tokens on Base. This build will begin in Q4.

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Second: The Focus for Q1 2025

1. Launch One or Two Leveraged Yield Products

Since icETH, Index Coop has not launched a leveraged yield product. The Product team is weighing several ideas including, but not limited to, an improved wstETH/ETH strategy and one of sUSDe/DAI or sUSDe/USDC.

More information to come in Q1 regarding which token(s) make it through the prioritisation process.

2. Launch New cbBTC and SOL Related Leverage Tokens‍

The Product team views various levels of leverage tokens for cbBTC and SOL on Base as the next key evolution for the leverage suite, and is actively planning for this expansion. For SOL tokens, a wrapped version will be needed and a conversation is open with Universal about this. Universal wraps tokens which are held at Coinbase Custody, to make it easier for crypto apps to simply offer a wider range of assets without worrying about multichain infrastructure.

Index Coop’s leverage products have achieved the strongest PMF and are the highest revenue generators. Expanding this product suite across chains and assets is a core strategy to increase revenue and financial sovereignty for the DAO.

Note: The leverage suite on Arbitrum and Base are the main tokens which have shown positive net dollar flows (N$F) throughout Q3 and Q4 so far.

3. Integrate icUSD More Widely‍

Some of the integration deals which are agreed in Q4 (target: three) may see the resulting live integrations in partners’ UX go live in Q1 2025, but the Partnerships team is also aiming for a further two top tier integrations agreed with CEXs, wallets or fintechs by the end of Q1 as well. This would mean five top-tier integrations by the end of Q1.

While this ‘integrations sprint’ continues, the Partnerships team will collect insights from conversations with partners which could lead to additional product ideas. If there is a pattern of demand for a specific, new product, Index Coop might choose to add this to the Q1 or Q2 roadmap. It’s also worth noting that the number and scale of CEXs, wallets and fintechs Index Coop is now able to talk to—via support from Chainlink and Circle—has increased significantly.

4. Launch and Market a Leverage Suite Referral Program

This would enable users of the leverage suite tokens to refer new users for various benefits. Leverage token traders are deemed the best audience to trial this on first, as the leverage tokens have both the greatest PMF of Index Coop products at this time and the largest fees (which makes for more appealing referral program economics).

More information to come in Q1 2025!

5. Update Index Protocol with leverage infrastructure improvements

Enable the leverage tokens to be even more efficient to trade and hold. This update, spearheaded by the Engineering team, aims to remodel how the leverage tokens operate—shifting from price takers to price makers for the assets they loop—and becoming generally more robust in the process.

6. App UI/UX Refresh II

‍Where App Refresh I focuses on improving usability in the bottom of our leverage and yield product funnels, App Refresh II will focus on our top/middle funnel, improving app usability and navigation while reducing friction and drop-off rates. We also want to make it really easy for our users to fund transactions without making multiple transactions or leaving our app to swap into WETH, USDC, etc., so we will increase the swap routes available to fund transactions. 

So, that’s the focus til the end of Q1 2025—stay tuned for plenty of related IIPs. But, you might also be wondering, ‘What didn’t make the roadmap?’ and ‘Why not?’

Internal ideas which did not make it:

1. Adding Advanced Trading Controls to the App‍

Implementing features like limit orders, stop losses, and take profit is planned for the future. These features will roll out gradually; however the scope of the research process and engineering effort remains uncertain. As a result this initiative has not been included in the roadmap for this period due to the unknown timeline for completion.

2. A Leverage Suite Fee Rebate Program‍

As an extension to the leverage suite referral program, this item was deemed out of scope for the current roadmap due to the limited availability of engineering hours. However, it could be implemented sooner than expected, providing users with rebates for a portion of the revenue they generate.

If this is a feature you would like to see prioritised, let us know here.

3. LINK Leverage Tokens on Arbitrum (2x, 3x)

While these tokens may be developed in time, they were not prioritised in the current roadmap. During the RICE scoring process, they were deemed a smaller opportunity compared to the leverage tokens mentioned above.

4. Adding Bridging to the App

This is another one which may be developed later. Index Coop contributors have strong connections with Across Protocol - which is currently being tested for icUSD bridging. Noting the Uniswap App’s integration of Across Protocol’s bridge for cross-chain UX, the App team is exploring how similar functionality might be implemented in the Index Coop app. More broadly, the team is considering how to abstract away chains and tokens to enhance the overall UX. We may also find that cross-chain swaps through a router like Li.Fi are able to be included in our App UI/UX Refresh, largely resolving this pain point.

5. Further Leverage App UI Improvements

Including, but not limited to, token abstraction and cross chain user positions view. With a lower RICE score, this item also failed to rise up the list of ideas in the prioritisation process, but it may be prioritised at a future date.

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External Ideas That Did Not Make the Roadmap:

We greatly value ideas contributed by community members, primarily through Discord and X. Below are some of the most-requested ideas from the past few months that were not included in the roadmap, along with the reasons for their exclusion:

1. AI, Memecoin or RWA Index Tokens‍

While on the surface it might seem that these are great ideas or easy wins, several key factors need to be considered.

• Insufficient Quality Assets
  When the Product team last conducted a deep review in Q2, there were simply not enough high-quality, liquid assets available to build a robust index around these themes. Additionally, Index Protocol's current limitations in multi-chain or cross-chain functionality restrict access to the already limited pool of liquid tokens.
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• Challenges in Scaling Thematic Products
  Scaling such thematic index tokens is hard and requires significant liquidity, incentives, and a dedicated market maker. Market makers, in turn, require a lot of volume to justify their involvement long-term. Index Coop used liquidity mining to help overcome this problem in 2020 and 2021, but this consumed about 10% of the INDEX Treasury and has delivered a very poor ROI, which is unlikely to be recovered.
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• Historical Underperformance of Thematic Products
  Many thematic sectors, such as DeFi, the Metaverse, and NFTs, have performed very badly compared to major assets over recent years. Admittedly, a memecoin index might have proven to be an exception to this rule, but some of that recent performance has come since the Trump election win and/or Binance, Coinbase and Robinhood listings.
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• Additional background‍
  • Forum post regarding an AI index and issues raised in the comments by the Product team‍
  • Similar forum post regarding an L2 index. Also note the comments from Product folks
  • The RWA index, while requested by a few community members and more viable in terms of available, liquid tokens, received very little presale interest (especially compared to hyETH).

Combining the above factors with a lack of clear demand signals—fewer than 10 direct user requests per product—and a total lack of integration interest from CEXs and wallets, core contributors have felt these products currently offer less value compared to other priorities. As a result, no IIPs for these products have been launched or passed.

However, it is true that certain crypto assets, such as SOL, SUI, and memecoins, have emerged to become larger and more legitimate in the last few months. Rather than launching an index, Index Coop could potentially add more value by adding automated leverage to them. What would you think about 2x or 3x leverage memecoin tokens, or a similar product for SUI? So far, Index Coop has observed significantly more demand for leverage than indexing in DeFi - while CeFi partners the Partnerships team engages with almost always want yield solutions for BTC and stablecoins (ETH yield is typically a solved problem on their platforms now).

2. Programmatic INDEX Purchases (and Potential Burning)‍

This idea—taking a percentage of revenue to programmatically buy INDEX (to recapitalise the Treasury) or burn INDEX (to reduce supply)—was mooted in a forum conversation in Q1 and Q2. It was thoroughly researched and discussed with large INDEX holders; however there are some notable downsides to be aware of and one to mention up top is that adding the burn element brings a risk of turning the INDEX token into a security, according to legal advice from a contributor regarding the U.S. This advice was affirmed directly by other crypto projects which spoke about their legal research in this space too. Then, the downsides of programmatic INDEX purchase are:

First, while this is a much lighter lift, engineering wise, than INDEX staking below, it’s not nothing and these engineering days need to be weighed considering the other items on the roadmap.

Second, with approximately three years of runway and Index Coop still being (if one is honest) in the pre-large scale PMF stage, this idea feels premature. It may be more prudent to focus resources on initiatives and experiments that drive TVL growth, increase revenue, extend the runway, and create more buzz. Token related ideas like this might be better revisited once INDEX is trading above $10 or $15, where their impact could be more meaningful.

It’s also worth noting how few crypto projects which have done buy backs have found this to be a major growth or success hack. The large INDEX holders which are professional investors have not been pushing this idea and have even cooled on it as 2024 has passed.

3. INDEX Staking

The concept of staking INDEX via a staking pool to receive stINDEX, along with a percentage of the DAO’s revenue, was also raised in the same Q1 forum post.

This idea is a very big one (in engineering terms) and suffers from a few major issues

• It would cannibalise almost all engineering resources for a period of time in an investment-heavy way that nothing else on the roadmap comes near. It’s a very expensive idea to test, especially while Index Coop is pre-large scale PMF
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• It would require a lot more legal analysis and even if the legal analysis comes out as positive, there’s still a risk a regulator (the U.S. regulators being most worthy of minding) could deem the changes to make INDEX a security. This would have a range of knock on implications for INDEX listings, products generally, INDEX holders, institutional holders of INDEX, etc. The risk level and ripple effect of these risks are significant.
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• Finally, similar to the programmatic INDEX purchases idea above, there is currently limited PMF, revenue or cash runway to justify this initiative. If testing this idea proves costly and fails to significantly impact the perceived utility of INDEX, it would become an expensive test that shortens the runway (via spending and revenue giveaways) and reduces optionality for the DAO. It seems more prudent to continue investing in ideas and tests to increase revenue and TVL, versus making an enormous, uncertain bet—with many risks attached—on INDEX staking at this time.

All that said about programmatic INDEX purchases and INDEX staking, if there is significantly more revenue and TVL in the future - and a higher INDEX price - this could change how these ideas rank in a prioritisation exercise. It’s true to say one of the differentiators for a successful Index Coop versus a traditional structured product builder is the DAO and token structure and the ability for product and/or INDEX holders to become aligned via crypto-economic incentives which aren’t available offchain.

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Finally, a quick aside: while this roadmap is quite ‘bread and butter’ focused, it seeks to help the DAO conduct more targeted tests to grow TVL and revenue. If successful, this approach will pave the way to increased ambitions, including gamification in the app, additional revenue share and referral features, and broader tokenomics and INDEX-related initiatives.

Follow Index Coop on X, join the Discord, or sign up to the newsletter to keep up to date with how the DAO delivers against the roadmap. An End Of 2024 Update will be published in late December with key updates regarding progress against the Q4 items of this roadmap.

Thank you for reading.

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