Celebrating 2 Years of the Index Coop

For the last two years the Index Coop has led the way in the emerging on-chain structured product space. But we’re not the same organization we were even a few months ago. In the last six months our community has transformed itself. Now, as we celebrate the second anniversary of our founding, we’re taking a moment to look back at where we’ve been.

On October 6th, 2020, the Index Coop was launched as an autonomous decentralized organization (DAO) by Set Labs. The community was made up of former TradFi professionals, engineers, and crypto enthusiasts. From the beginning we were united by a belief that decentralized finance is the future and that it’s up to us to make sure it includes everyone.

During that first year:

• We launched the DeFi Pulse Index (DPI), which remains one of the industry’s most successful on-chain index products.

• We raised >$10 million from venture capital firms, including Sequoia Capital, Galaxy Digital, 1kx, DeFiance Capital, Blockchain.com Ventures, Assembly Capital, 1confirmation, White Star Capital, and Wintermute.

• We launched 6 products and our native governance token, INDEX, DPI, MVI, BED, DATA, ETH2x-FLI and BTC2x-FLI.

With a few early successes under our belt, what began as a small community of a few contributors soon grew into a large decentralized operation.  At our peak in late 2021 we had 120 paid contributors and $500 million in TVL.

But even as we celebrated early success there were signs we were headed in the wrong direction. Disorganization and a lack of progress on important products frustrated some contributors. At times we failed to meet the needs of our external partners. We were dependent on Set Labs for the ongoing maintenance of some of our products and infrastructure. And a sober look at our balance sheet made it clear we couldn’t sustain our spend rate. We knew we had some hard choices to make. And our investors and partners saw that change was needed, too.  

In April 2022, Set Protocol and 1kx published an open letter outlining their concerns. They asked us to:

• Define who we are as an organization

• Address over-spending and financial sustainability

• Improve our relationships with external partners and collaborators

• Refocus on building winning products

These recommendations helped kickoff a series of difficult conversations. Through the Summer and into the Fall we addressed all of the concerns outlined in the open letter by:

• Reducing contributor spend by 40%

• Developing and evangelizing a strategy for winning in the on-chain structured product space

• De-risking our treasury investments to better protect our runway

• Working with Set Labs to return 9.5% of their INDEX to the Index Coop Treasury to incentivize high value contributors

• Building out our technical stack and creating an Index Protocol fork of Set V2

The last two years have been a rewarding and transformative journey for our community and for DeFi as a whole. As we enter deeper into a global bear market, we could not be more optimistic about our ability to thrive and build products that are secure, accessible and simple to use.