Our guest today is Crews, Ecosystem Growth Lead at Index Cooperative. Index Coop is a decentralized platform that creates, manages, and trades baskets of crypto assets in the form of index funds. By holding a single ERC-20 token, investors can gain exposure to a specific crypto sector or leveraged strategy, such as DeFi, Metaverse, or Liquid Staking Tokens.
In this conversation, we explore the value and challenges of on-chain indices and the range of products offered by Index Coop. We also discuss the risks associated with investing in index funds and how Index Coop manages and mitigates them.
Hey, everyone. I'm your host today, David. I lead research at Exponential. Exponential DeFi is a platform where we want to bring more rationality into the space and make it more accessible for all types of investors. In Degen responsibly, we invite protocol builders to talk about their innovations, what makes their protocols unique, as well as how they manage and mitigate risk. Today, we have Index Cooperative as our featured guests. And joining us from Index Coop is Crews. Hey, Crews. Excited to have you here. Hello. Yeah, happy to be here. And what is your name? I'm speaking with on the other end of this Exponential DeFi handle. Yeah. So I'm David. I'm today's host and I lead research here at Exponential. Got it. Sorry. Yeah, I know we had coordinated a bit in DMs and everyone's got a different pseudonym that they go by. I go by The Young Crews, but my name is Crews. Nice. Yeah, yeah. My other persona is Dawei, but yeah, you can go by David as well. I know you wanted to talk about risk briefly here before jumping into Index Coop. Yeah, I can just introduce myself quickly first. So Crews or The Young Crews, my title for myself is ecosystem growth lead at Index. It means I do kind of all off-platform growth activities. I do partnerships across DeFi, touching a little bit of CeFi, TradFi wallets. Also lead the social media efforts behind all the Index Coop handles across social media. You know, we're experimenting with some Web3 social stuff like Register and Lens Protocol. You can also find us on more traditional platforms like Twitter, LinkedIn, YouTube. Awesome. Yeah. So there's a lot going on there. Sure. Yeah. I've been with Index since April of 2021. So I just hit, I think my two-year anniversary this month. I've got a solid team of folks. A lot of us came in around the same time, a little bit before that, a little bit after. You know, all kind of folks that happened into the Index Cooperative community. We all kind of, most of us started by owning one of the products. Index Coop, of course, creates on-chain Index products. So you can think of them as kind of analogous to ETFs and the TradFi world where you buy one token and get exposure to a basket of different tokens underneath, or sometimes kind of an automated strategy that actually uses DeFi protocols, abstracts away some of that complexity and just gives you a simple token to buy and hold. Yeah. Yeah. Super interesting what you guys are building at Index Coop. Should we dive into some of the questions on the protocol side? Sure. Yeah, we can begin. I think I gave an overview of the product there, and I think why we're excited to kind of collaborate here with the exponential DeFi team is really the need for risk ratings in this space. You know, you can imagine our visions and missions are pretty similar in DeFi and that Index Cooperative also kind of espouses a mission of making DeFi more simple, safe and accessible for everyone, and especially kind of folks that are traditional investors or used to investing in kind of traditional finance rails find this whole crypto revolution very interesting, but maybe are going to spend all day on Twitter and Discord researching all these individual protocols. You kind of just want to participate in the space while outsourcing some of the due diligence or complexity of different strategies. So we've got a pretty similar mission to exponential DeFi and working to make DeFi more accessible for everyone. Yeah. Yeah, for sure. You know, for us, we have a really similar view to what you were saying. We think understanding risk is key to smarter and better DeFi investing. And it's what, you know, I think will bring in the next million or so crypto or DeFi users. And that's why we did create the exponential risk ratings. It serves to be this institutional grade risk assessment tool for DeFi investments, similar to what like Moody's and S&P does today for credit risk. And so, you know, we built for the first time, we've won the first to distill all these risk vectors in DeFi and provide it to you in a simple letter grade. Yeah. So I guess, you know, question for your role at Index Co-op, what problem is it that you're trying to solve and why do you think Indices is the right tool to get you there? Sure. Yeah. The problem we're trying to solve is making the best of DeFi more accessible to, again, kind of the more traditional investor or a non-crypto native investor or someone that, you know, maybe you're deep in the weeds, you're busy building something, you don't want to spend all your time kind of due diligence and seeing different protocols and keeping up with the performance of every individual protocol that you're invested in. So it's about simplifying, right? Our products are simple to use, they're accessible to everyone with an internet connection. They're just an ERC-20 token that you can buy and hold in any, you know, self-custody wallet. And they're secure. Our products are built on the Set Protocol platform, which kind of evolves to have the keys to the protocol and create our own thing called the Index Protocol that I'm sure we'll get into later. But the TLDR there is all the products are built on the TokenSets platform that's been audited multiple times. That's pretty windy. It's secured over half a billion dollars of TVL for since 2020 of October, so two and a half years now. So, you know, simple tokens that people can trust, you know, buying and holding a token and getting passive exposure to a sector or to automate a particular strategy. We've got leveraged products, we've got yield-bearing products, as well as kind of what you think of as a more traditional index, where our first product was the DeFi Pulse Index, which is a market cap weighted basket of DeFi tokens. So, you know, you're excited about the DeFi theme, you can buy this one token that gets you broad exposure to the sector. So a similar value proposition to kind of ETFs in the TriFi world, but the products are self-custody, which is a big deal. They're trustless because all of our tokens are permissionlessly redeemable for the underlying assets. So if you want to take that DeFi Pulse Index token and redeem it for, you know, its component parts of the Uniswap token, Aave token, Compound, Yearn, et cetera, you can do that through our permissionless smart contract. And that's actually how our products keep their price in line with the net asset value, because arbitragers can always mint and redeem to take advantage of any spread. So typically, you know, you're going to see your products trading within 1% of net asset value because of that open arbitrage that any ARB bot or individual user can take advantage of. So just to recap, the problem we're solving is simplifying the best of DeFi. Yeah. Yeah. I think, yeah, what you guys are building with the indices is definitely a great tool for more retail users. And it will definitely simplify the landscape in crypto just because there's so many new projects and things going on all the time. It's nice to have this sort of ETF product where an average retail user could just buy it and hold it and just passively ride it as DeFi evolves. Yeah. I think what makes us really unique here is the ERC20 form factor, simplifying things into a simple token that you can buy and hold in your wallet. And it's not just for retail users or, you know, most folks in crypto could be classified as retail, but it's not just for folks that are kind of new to the space and don't know all of the ins and outs of all the different protocols. Like I use our products as well, because the form factor offers some nice advantages and automatic rebalancing. So that does go to the taking time to keep up with the latest trends thing that some people may have time to do. But there's also a lot of gas savings and the products kind of automatically rebalancing on the backend for me, but I can just buy and hold that index token. So one, I don't need to worry about rebalancing. Two, I don't need to execute any sort of rebalancing that takes obviously a lot of gas costs. We're doing a lot of mainnet Ethereum. And three, there's tax advantages to me not taking any taxable events. I can just buy and hold that product, right? So some of our yield bearing products, for example, I've been holding the ICE token for over a year. We'll probably get into what exactly that is, but it's a leverage liquid staking strategy. I've been holding it for over a year now. It's gone up by 23% denominated in ETH since June of last year. So I'm almost at long-term capital gains on that particular token without having to do any sort of rebalancing. The price of the token is just going up. So I can just hold it without worrying about any sort of taxable events or having to rebalance or pay gas costs. Not financial bias, not tax bias, of course, but just a good example. Yeah. So I guess you guys have been around for a while now. And to your point, it's not just for retail users. So what would you say is your core audience that you're targeting right now and who is adopting more of the index products currently? Yeah, it's folks that want to automate more and more of their finances. They want to simplify their financial life on-chain, like I mentioned. So gas advantages, rebalancing advantages, save you time researching. You just want to focus on building, focus on your career or your time on other things. We're going to save you time and transaction costs, fees, etc. But right now, our products are self-custody. They're entirely on-chain. So it's people that have already adopted crypto, that have your own wallet, that are prepared to handle their private keys, etc. And increasingly, we're going after kind of a more hybrid market of people that maybe use centralized exchange, exchanges that understand where self-custody wallet is, but prefer to keep their assets on a centralized exchange or with a custodian. So we've gotten our products listed. One of our index products, the DeFi Pulse Index, is listed on Gemini. It was the first index token to be listed on any sort of centralized exchange. And our products are available with BitGo as a custodian, Coinbase custody, etc. So we're moving a little bit towards... So far, we have gotten some cryptomotive hedge funds to use our products. And kind of the more traditional financial actors are still diligencing and getting connected with all these custodian options. And we're running after a more institutional as well. But the great news is these products that are really targeted towards maybe high net worth individuals or have complex strategies that traditionally only higher net worth people have done, these products are available for everyone in the world in the internet connection. You can have access to the same exact strategy by just buying the ERC-20 token. So ultimately, everyone will be our audience. But right now, it's people that are excited about taking control of their finances, that are excited about investing and want to self-custody their own assets. Got it. Yeah. So why don't we dive into some of the products that you offer at Index Group? Sure. You know, I think we can start out with, you know, you mentioned ICE. I know you guys recently launched another ETF on the liquid staking side with DSEs. Maybe you could talk a little bit about both of those, the differences between those strategies and which type of users would buy both of those. Yeah. Yeah, I'll go ahead and take it away. So we've got three types of products, right? We've got the sector indices, which again, is a kind of more traditional thematic index, DeFi Pulse Index, the Metaverse Index, the Bankless Bet Index are all good samples of these where, you know, you buy a single token and get diversified exposure to a particular sector. DeFi, the Metaverse, that is kind of like an all-in-one starter token, one-third Bitcoin, one-third Ethereum, one-third DeFi. All of those kind of, you know, get passive exposure to a sector, pretty simple to understand. Then we've got leveraged products. So we call these our fly series, FLI, for Flexible Leverage Index. We've got one that tracks 2x exposure to ETH and one that tracks 2x exposure to Bitcoin. So again, you know, that gives you 2x leverage in a simple token that you can kind of buy and hold or swing trade. It's really the most common use case for that. And those actually are fully collateralized and use compound on the backend, right? So within the smart contract of the ETH 2x FLI token, you're going to deposit ETH into compound, borrow stable coins against it, buy more ETH, and it's going to stay kind of targeting a 2x exposure ratio. So it will automatically rebalance every day to make sure you know you're close to that 2x leverage ratio in a simple token. That's how our leverage products work. And then you've got yield generating indices as well. You mentioned a few of them, DSE and ICE are our most popular ones. And we've got one with Bitcoin recently as well. But I'll go ahead and break down the couple of different products that live in that suite. So I'll start actually with DSE. We launched it in January. DSE stands for Diversified Staked ETH. So the DSE index gives holders diversified exposure to the top liquid staking tokens on Ethereum. So under the hood, you're getting exposure to Rocketpool's RETH, Lido's STETH, and Stakewise's SETH2, I believe is the ticker for that. But they're all just liquid staked ETH tokens. So that token is going to give you diversified access to the top liquid staked ETH tokens. And it's weighted according to their decentralization score. That's scored based on the number of node operators that they have. So, you know, Rocketpool scores the highest on that one, right? They've got permissionless, kind of anyone that can stake from home and sign up to be a part of the Rocketpool network. The Lido staked ETH token has permission node operators. So a little bit more concentrated, there's only a few different professional node operators in space. But all of them are going to give you exposure to Ethereum staking yield, which if you're not familiar, it's been between 4% and 7%, let's say, since the merge. The DSE token gives you diversified exposure to those. And again, it's optimized to incentivize decentralization, because the more decentralized a liquid staking protocol is, the higher share of the index it gets. So for the holder, you're getting diversified exposure, you're lowering your risk by, you know, obviously diversifying. And then for the Ethereum network, the more decentralized protocols are rewarded with a higher share of the index. So we're really excited about how this product incentivizes the liquid staking protocols to focus on what they can control. And making sure their operations are fully decentralized, their fees are low, and giving the best possible user experience to stakers, without having to kind of individually spend too much time on business development and marketing really will help some of the smaller or like more upstart protocols as they break in. But the inclusion criteria is pretty rigorous. So, you know, protocols will have to be deployed, will have to be open source, will have to be a little bit windy before they get included in there. But we're really excited for this product over the long haul to really simplify each staking decisions for customers that they know they want to stake their ETH, but they don't necessarily want to put a law with one protocol. Or maybe they're concerned with, you know, some protocols being too centralized. You know, I think in the crypto native space, there's a lot of rhetoric about, you know, LIDO's to centralize. We don't want all of Ethereum going with one particular staking protocol, which I think is a good move, right? Decentralization is key to the ethos of the space and how these networks operate. So we're really excited about that one, how being good for this network and good for the holder. And then we also have ICETH, which is a leveraged staking product. The interest compounding ETH index is the full name there. So ICETH automates a leveraged staking strategy with LIDO's staked ETH token and Aave's money market. So within the smart contract there, it's depositing STETH into Aave, borrowing ETH against that staked ETH. So two very correlated assets. So it's not like, you know, there's going to be a sudden price movement and you get liquidated. Borrows ETH against the staked ETH and then buys more staked ETH. Leverage ratio is around 3x, right? So you're going to get 3x exposure to LIDO staked ETH and you're just going to pay the cost to borrow ETH on Aave. So this one has been averaging between 5x to 10x. It'll spike up to even 20%, 25% APY for a short burst of time when staking yield is high. So a little bit higher risk in that it does use leverage, but you're borrowing correlated assets and there's automated risk management built into the token. So automates a leveraged staking strategy that's a little bit more popular with the DeFi native users that want to get a little bit more than just your standard ETH staking yield, which DSETH or just a simple LIDO staked ETH would provide for you. Super cool. Yeah, I want to applaud you guys on your criteria for DSETH. I think you're one of the first to push more of this decentralization factor and your methodology for RocketPool. And yeah, so I guess just to recap, the DSETH is more for a more passive investor who wants just like their typical staking yield, but they don't want to be too overexposed to a particular liquid staking protocol. And then ICETH is more so, maybe a slightly riskier investor who wants enhanced exposure to the ETH staking yield. Yeah, that's right. So for DSETH, absolutely, you're getting the baseline ETH staking yield while diverse buying. Buy and hold that one for pretty much forever. You don't need to check on it too much. It's just getting the base staking yield. And for ICETH, you are paying the cost to borrow ETH on Aave. There is leverage involved. So as the borrowing rate on Aave goes up, the overall returns on that product go down. So that trade has been on for a long time. It's been very profitable and one of the most popular trades in DeFi. So that's why we built the strategy. But you may want to check in every once in a while to make sure the net yield is still positive. It has been to date and it's been delivering incredible returns, but it is for a little bit more of an active investor that's keeping track of what's going on in DeFi. But like I mentioned earlier, I've been holding that particular token for over a year now and I just shared a tweet in the space here. You had exposure to the LIDO STE to ETH exchange rate, right? Which for folks that have been paying attention a lot over the last year, STATEETH was trading at a bit of a liquidity discount last summer when Celsius and 3AC were for sellers of the STATEETH token because withdrawals were not enabled yet. So it did trade below 1ETH, the ICETH token, right? So you could have potentially bought at peg when we launched it. And then when the STATEETH exchange rate went down, you had leverage exposure to that. So it was trading your discounts ETH for a while, but that was an opportunity for some people. Like it mentions in there, if you bought the ICETH token last June, you're up 23% by holding to now versus ETH. So yeah, it's a little bit more of an active product and we're automating the risk management for you. So a lot of people will do this trade manually, right? I'm going to buy STATEETH collateral, I'm going to borrow against it and I'm going to lever up. But ICETH automates the management of that position for you, which is pretty useful for a more passive investor. Even if you're paying attention, right? It's really nice to not have to execute those redoubts yourself, not have to watch the chart yourself and also to not have to take any sort of taxable event. Yeah, for sure. Simplicity is key. So I guess my next question is then, what is the methodologies for determining these different allocations within DSEETH or DPI, MVI? What's stopping index co-op or some privileged role from changing the underlying allocations at will? Yeah, so for the sector products specifically, we've got a third party methodologist on them, right? So for the DeFi Pulse Index, DeFi Pulse, or there's a kind of a spinoff unit within Enquals Galara that really handles the methodology. They're in charge of creating the methodology for the products, ratified by governance, those for the index token. And then it's cooperative, execute the rebalances to meet the specified criteria. We're working on kind of fully automating and putting the entire rebalance process on chain and making it completely autonomous. It's not quite there yet with the tech stack. We've got to make sure you have enough safeguards in place that you're not getting hit by kind of MED attacks, especially if you're going to publicize what you want the weights of checking token to be and people trading against you and whatnot. But the good news is the tokens market cap versus the market cap about assets that are underlying it, relatively small ratio. So we're not necessarily like moving the market too much. We'll rebalance these things. So third party methodologists give the criteria for those sector indices. And then for the kind of the yield bearing ones and leverage ones, we post obviously the target leverage ratio when we create the products. And we set the, like I mentioned, the rebalancing for ICE and these leverage ones are automated. They're going to, you know, lever up towards that target ratio. So it's kind of embedded in the smart contract code what the target leverage ratio is going to be for ICE or e-commerce supply, for example. Got it. Okay. That makes a lot of sense. So I guess in regards to the current DPI and NBI products, they saw a lot of, I think early on when they first launched, there was a lot of strong reception during the bull market, but it's chilled off a bit since then. You know, a large factor of that is the bear market conditions. Are those index products something that's being actively still managed by those methodologists? Or is there, once they launch it, they kind of just leave it to the smart contract to run? Yeah, go ahead. Yeah. So the methodologies are still absolutely updated. Absolutely updated. I'll see if I can share a tweet here about NBI, but we recently kind of revamped NBI to take out some tokens that no longer have, no longer meet the liquidity requirements and add in some new ones, some new fresh blood into the index. So the short answer is we, you know, for the tokens, you create a methodology and then we follow the rules and that, you know, we update it for every rebalance. Like, okay, it's supposed to be market cap weighted, but if these tokens no longer have a large high enough market cap to be included in the index, we'll swap them out for new ones that will come in and take their place. And we also have to take into account the amount of on-chain liquidity available for particular components. So if, and I'll use like Axie Infinity as an example, I think it has had plenty of liquidity, but if it was hot in the bull market, there was plenty of liquidity, there was plenty of volume, et cetera, you know, and have a nice role in the index. If when the bear market hit, no one was trading that token anymore, no one was LPing it without liquidity, we would remove it from that NBI index to make sure that holders are in safe assets that have plenty of liquidity and aren't going to take a huge loss when we have to sell it out. So, yeah, I mean, the short answer is we create passive rules-based methodologies that we can kind of follow without having to actively manage and like pick stuff, you know, based on discretion, right? We just follow the data and passively track the methodology as it is written in the governance vote when we go to launch a token. Okay. And is there, are you able to walk through like a process of how a new crypto index could be created through index pull-up? Is that through the governance process? Yeah, it would absolutely go through the governance process. So anyone can come and to the indexgroup forum, go up to indexgroup.com, create a proposal for an index. You know, you'd have to go through kind of some mandatory feedback period of, I'm not sure what it is, you know, a week, something like that, two weeks maybe, before you can do any sort of like snapshot vote. You know, if the idea is feasible, right, there's enough liquidity, okay, you know, that methodology could actually be done, it could be kept up to date. We'll go through two different votes. First is decision gate one, just to kind of get an attempt check and are people actually interested in this. So all index holders, we have our own governance token called index. We'll vote on it. And if it goes, gets voted up on decision gate one, you know, our product team will kind of do further due diligence to make sure we're backtesting the strategy, again, make sure everything's got enough liquidity, it can totally be done. And there'll be a final decision gate two vote as well. And if you, you know, that one is voted for by token holders again, then we will go ahead and write the contract to deploy the token. I guess I should say you don't have to write new contracts necessarily because the architecture underneath, you know, all the smart contracts are already there. What in what used to be set protocol, set protocol v2, set protocol, I guess I'll go ahead and kind of get a backstory here. Set protocol was kind of an asset management layer for tokens created in 2018 or 19 or so. And then the index flow operator was the was launched after the DeFi pulse index was created basically between DeFi pulse and set protocol created the token called DPF co-op was kind of to be the growth marketing arm for that product and the DAO was spun out in 2020. Index co-op was responsible for something like 90% of all the TDL of stuff built on set protocol, right with all the index products are by far the most popular ones. So eventually set protocol kind of gave index co-op the keys to the protocol and moved on to, you know, go and build something else. So index protocol forked set v2 and have our own index protocol now where we will continue to upgrade and add on new features, but basically all products by index co-operative are built on those smart contracts, set protocol v2 or index protocol. And they kind of all use the same underlying architecture. We will only kind of add on a new module every now and then. So like, okay, we need an Aave adapter so that we can do these leverage tokens and do ICE and just kind of like a modular architecture where you should create a new level adapter to use a new protocol. So whenever we use something like that, we've got to get a whole new round of audits, but you can build new strategies using the same smart contract architecture that happen to deploy any kind of new, slowly new code. So okay, that was me explaining the process to create a new index. So I think we covered that one pretty well. Yeah. Nice. So let me, you know, there's one product that I missed, so kind of I'll give another one. It's called the GITCOIN State ETH Index. So a proposal came in from GITCOIN for us to create a product with them. Again, it kind of went through that governance process that I just described, but the product that came out of it at the end was, the ticker is called GTCETH, the GITCOIN State ETH Index. So what that one does is it uses DSE on the, under the hood, and then there's a kind of additional wrapper on top of it that gives a streaming fee to GITCOIN. So effectively, there's a 2% fee on the token per year, but, you know, you're getting state ETH yield of, you know, four to 6%, let's say the base state and yield from DSE. So half of your state and yield goes towards GITCOIN to fund public goods, it goes into their matching pool and kind of gets distributed across all of the, you know, if you're familiar with GITCOIN, they do these funding rounds to get grants to public goods using kind of quadratic funding. So GTCETH, basically, you get diversified state ETH yield, and then half of your state and yield is going to go to GITCOIN to get donated towards public goods. So there's an example of kind of collaboration where GITCOIN came in and proposed products to build on the index architecture. Now there's this token out there in the world called GTCETH that anyone can go and buy. If you want to support public good funding with ETH state and yield, all you got to do is buy and hold, you know, the value of that token is still going up, but half of your state and yield is going to fund public goods. Nice, nice, super cool. Yeah, just curious on the, in addition to the governance process itself, what other utility or rights do index holders have? I believe there's, you have the ability for this meta-governance. Oh yeah, yeah, yeah, absolutely. Yeah, yeah. I can go ahead. So the index token, you can vote on any index co-op governance bouts, like we described, you know, in our forum, our snapshot, et cetera. And we also have meta-governance rights for the index token. So what that means is you get to vote on all of the protocols that are inside the DeFi Pulse Index, right? There's all these DeFi governance tokens in there, Uniswap, Maker, Aave, Compound, et cetera, right? So when those guys go to vote, they got anything up on their snapshot, all of the governance power of all of those tokens that are locked inside the DPI smart contract flow through to the index token holders. So if you want to, you can buy index and we will hold our own vote anytime Aave has a governance proposal, right? We will kind of like feed through that governance proposal onto the index forum and index holders will get to vote on that matter. And like if we vote it yes or no, we will take all of the Aave tokens, the DPI smart contract and vote them, you know, according to how the index holders vote. So the index token gives you governance exposure to Aave, Compound, Uniswap, et cetera, et cetera, et cetera. So, you know, kind of interesting use case there. You saw SayProtocol back in the day bought, I forget, $1 million worth of index tokens and then use those index tokens to vote yes on an Aave proposal to get their stable coin listed on the Aave money market. So they bought $1 million of index and then leveraged that into $10 million of Aave tokens to vote yes on something. So, you know, yeah, basically the index token holds all the governance power of the entire DPI index, and we can enable that for kind of any future products that we launch that also have a bunch of different governance tokens inside of them. Some of those MVI tokens have a little bit of governance power, and we can do that for future indexes as well. So it's a pretty interesting little way that governance power can flow through to the initial version. Yeah. Super cool. I think it reminds me kind of like Comebacks with its control over curve and tracks governance. Cool. So I guess the last question for me is moving on to your roadmap. What's next for Index Co-op? Any new plans or strategies, new indices ahead? Yeah, absolutely. We're always building. So I think people have been asking us for a while to do stablecoin yield, right? We mentioned all these e-staking yield products we have with DSE, ISE, and GTC, risk-primed stake-to-yield exposure, leveraged stake-to-yield exposure, and public goods funding stake-to-yield exposure. We're working on a suite of stablecoin yield products that we're bringing to market. We haven't brought any stablecoin yield products to market so far because the yield sources have been ever-changing, variable from all sorts of kind of yield farming activities around DeFi. We didn't feel like there was really an opportunity to create a passive product that just creates like a kind of sustainable yield on stablecoins. But we're finally seeing kind of organic yield available via lending markets, via LPing, and even real-world assets. So we're kind of trying to attack all three of those themes of a new stablecoin yield suite. So I think you'll see us launch a money market index pretty soon that gives you kind of diversified stablecoin yield exposure, very low-risk, low-to-medium return type of product, right? It diversifies you across a bunch of different stablecoins for USDC, DAI, Tether, et cetera, and then many different money markets, so Compound, Aave, Notionals, Fixed Rate lending as well. Low-risk, low-return stablecoin yield products, we'll probably see us do a medium-risk, medium-return stablecoin product that kind of bundles together a bunch of different LP positions, and again gives you diversified exposure across many different stablecoins. And then we'll look to do a real-world assets index, real-world assets index as well, that you know, uses some protocols like Goldfinch or Centrifuge, kind of bundles up those into a little bit more of like a higher-risk, higher-return stablecoin yield product, and potentially we could create like a token that diversifies across all those opportunities for people to kind of buy and hold. You know, with yields where they are in stablecoins right now, it's a little bit low compared to what's happening in the traditional Binance market, but there's a lot of stablecoins on chain and things like Dow Treasuries that are looking for the best yield opportunities on chain that we'll be building those for. So stablecoin yield is a pretty exciting market for us to go after, and I think we're going to build products that track the ETH-BTC ratio, and the BTC-ETH ratio will do both sides of that eventually as well, probably sometime this summer. So those are a few things on the roadmap that we're pretty excited about in terms of products coming up, and I think you'll also see us collaborate with some, or at least get our products powering the earn programs on some CeFi entities. We've got one that should be announced sometime this week with a big CeFi firm out of Singapore that's going to use that ICETH token, again, the leveraged liquid staking strategy, to give their kind of custodial users access to on-chain yield. I think last year you saw a lot of CeFi blow up because they were using opaque, you know, they were rehypothecating customer assets and using things like Genesys. Genesys was, you know, kind of a traditional TradFi operation that was rehypothecating customer assets to kind of deliver an opaque yield, and eventually got caught in a liquidity branch when the tide went out. But by some of the CeFi firms using our actual on-chain products, you're going to have sustainable yield, you're going to have transparent yield, and people can actually see where the yield's coming from, see where their assets are. So we're pretty excited to be powering kind of the next wave of CeFi innovation in the space and offering, again, our mission of making DeFi more accessible to more people. You know, you don't have to necessarily use the self-costing aspect of DeFi, you can still take advantage of the transparency and the power of DeFi while still using custodian while still using kind of a more traditional on-ramp. So we're excited to partner in that world as well. Awesome. Yeah, I'm excited for all the things coming up. Yeah, it looks like this yield pivot or just stronger pushing the yield almost kind of pushes you guys against some of the yield optimizers out there like Yearn or Somelier Finance. Is that like a vector where you're trying to target some of those audiences? Yeah, that's fair. I mean, we're trying to take the best, most popular strategies in DeFi and put them into simple, safe and accessible wrappers. And then the advantage of our form factor of being on the ERC-20 index allows for our tokens to be used as collateral, right? DeFi can be used in Aave, for example. But yeah, absolutely. We want to tap into the best yield-bearing opportunities in DeFi as well. So yeah, Yearn and Somelier are quality protocols that do similar things. We just have a little bit different form factor, different process in terms of our kind of more passive warrior products where, you know, your unit is a little bit more of an active, you know, they're going to switch the strategies out to go and actively go and find the best opportunities. We're going to try to find like the battle-tested opportunities and strategies that we see being kind of consistent and available for a long time. Cool. Cool. Awesome. Well, I'd like to open the mic now to anyone in the audience who would like to ask any questions for Crews or I. Yeah. Sure. Yeah, I'd be happy to take any questions if anyone has them. We have a question in the comments from Oscar, our Head DJ at Exponential, Head of Product. Question is... Oh, Crescent? Let me invite him. Hey, Crews. Thanks for the mail, Crews. I'm very curious to see all the future products come out. I think if it is seen something that you're often like in the Twitter meta, being actually able to trade it will be quite fun as well. Concretely, the question, do you see any price expand across chains? I know some of your products are in Polygon, but now it's like L2C sent lately. So any updates to that? Yeah, great question. So yeah, we love for our products to be accessible wherever folks want to buy them. So currently, most of our products are built on Mainnet. We experimented with some products that were deployed and built on Polygon. Didn't see a whole lot of uptake there. So we're not operating those on Polygon anymore. But the good news is, so our products are ERC-20 tokens that can be bridged to any chain. So you can buy it on Mainnet and bridge it over. So we did that for Polygon first, kind of created enough liquidity on the DEXs, on Quickswap and whatnot, build by DPI, MBI on Polygon. And then our main L2 where we've been operating is actually ZK-SYNC, now called ZK-SYNC Lite. But pretty much all of our products, except for the flies, are liquid on ZigZag, an order book exchange on ZK-SYNC Lite. So folks can bridge over and buy them there. The main reason we've kind of operated there for us is the fantastic integration into Argent Wallet, which again is a smart contract wallet, if you're not familiar. So it allows social recovery, pretty sweet feature set in there. Check them out if you haven't already. And there was like a fiat, direct fiat to Layer 2 on-ramp. I think they're the very first ones to do that, you know, over a year and change ago. So all our products are available there. And we recently have partnered with Rhino.Fi, who is a multi-chain aggregator. It allows you, you can deposit into Rhino.Fi from almost anywhere. From Binance Smart Chain, from Arbitrum, from Polygon, from Mainnet, and from ZK-SYNC era. You can deposit into Rhino.Fi and get exposure to our products there. DSE and ICE, they're the first two to be offered on Rhino.Fi. So you can get to our products from any of those chains. We haven't, you know, created protocol and liquidity on kind of your more standard DEXs and all of the different Layer 2s, because, you know, one, it's just very capital intensive. And two, the mint and redeem for arbitragers to keep products in line with an asset value. Those contracts are on Mainnet for our products. So, you know, without putting an enormous amount of protocol and liquidity on all these different Layer 2s, we're not able to keep, to absolutely ensure that they'll be trading directly on TAG. So especially for these yield-bearing products, like we don't want people buying in at, you know, a premium of like a few percent and it takes months and months for them to like accrue that yield back. So that's kind of the reason we haven't been on traditional DEXs all over the place. But, you know, we're always pursuing opportunities to expand and, you know, Rhino.Fi is a great example of that, of like kind of a tech stack or user experience that works for our products. And you'll see us get on more Layer 2s over time as the right infrastructure comes into place with some of these kind of faster bridges and market makers that are willing to, you know, kind of ensure our tokens stay at net asset value on all these different Layer 2s. But with some of these optimistic roll-ups and like the seven-day withdrawal time, it just hasn't necessarily been technically feasible or like it's too capital intensive to necessarily launch. But, yeah, I mean, obviously, a lot of people probably listen to this kind of work in the cross-chain space. We're always open to, you know, if you think that you've got a product or a partnership that can help us do that, you know, I'm always taking meetings with different bridge protocols and things like that. So, you know, we're happy to, we're always excited to get our products successful at where we best we can. Awesome. Thank you. Hey Hans, you're a speaker, but you're muted. All right. Do you hear me now, guys? Yeah. Okay. Cool. Cool. Actually, I've been following Index Kube quite a while. I think there's tremendous potential and I really think the stuff you're doing is cool. But as exponential also is about risk assessment, I would like to have you take a crew first maybe. What are the key risks associated to Index Kube as a DAO and maybe to some index products that might keep you awake at night or might make you sink? And then to exponential, what is your take on the risk assessment if you would do a risk assessment on Index? Sure. Yeah, I can begin. Yeah. I mean, let's say first in DeFi, there's always smart contract risk that you have to keep in mind. Again, we've got a strong track record with, you know, many audits on a separate platform as well as kind of us being the Lindy-ist and, you know, we've been the leader in on-chain indexes since, you know, the leader in a small category to be fair, but we've had over half a billion in TVL and smart contracts are solid. So that's one risk for people always. Two, I would say there is volatility risk and, you know, E2XY or these sort of these leverage products. There's automated rebalancing. You know, we've got a few layers of safeguards in terms of there's a ripcord that can like manually be pulled. We absolutely have to de-lever and transactions are failing because Ethereum, you know, gas costs are high and things are going through. So that's, you know, in times of enormous volatility, I'm definitely kind of watching in terms of, you know, watching the risk management play out on the DeFi products or ICE, Nintendo's leverage involved is another one. And then for ICE, I think interest rate risk is a big one, you know, and you're levering up on that staked ETH spread. You always got to watch to make sure that the ETH borrow cost is not exceeding the additional stake meal that you're getting. So that's like, you know, another pain on my risk management dashboard that we have open all the time. And then there is some multisig risk associated with kind of the operational side of rebalancing as we work to fully decentralize and automate rebalancing process, you know, kind of looking to implement sort of like different mechanisms, like maybe using a Dutch auction, etc. So like fully automate the rebalances. So there is some kind of operational risk there that is present currently. Cool. Thanks. And then there's always like kind of the regulatory side, we have to make sure, you know, all of our products are passive and not actively managed, but you know, not that there's any sort of clarity from, you know, SEC in the US, etc. But you know, everyone in crypto is kind of in the same boat in terms of the lack of regulatory clarity there. So, yeah, it's always kind of an elephant in the room. Yeah. I'll just speak broadly on on index call, you know, risk rating as a protocol, well audited protocol by experienced auditors at a public team, you know, they have the lending effect to Kruse coin, they've been around since 2019, 2020. So no major concerns there. I'll just have one call out is I believe the governance process is currently mainly conducted on Snapshot, which is an off-chain voting portal. So I believe there's still a multi-sig risk there to enact actual governance votes on Snapshot. But correct me if I'm wrong, Crews. Yeah, that's correct. And that's absolutely fair. Similar upgrade, we're working to implement on-chain governance when we can. Good news is, you know, kind of all actors are economically aligned around the index token. Our team, you know, holds a large share of the index token and we're all kind of economically aligned. But yeah, we would love to have governance fully on-chain and, you know, autonomously executing as soon as we can. Cool. Thanks a lot, guys. Yeah, thank you. Thanks, Hans. Well, I believe that is all the questions. So I wanted to take this time to thank you, Kruse, for, you know, walking through everything about index co-op, talking about risk and wish you guys success going forward on all your new products. Yeah, absolutely. Thanks. Thanks for having us on. Yeah. So if you guys liked what you heard, you can check us out. Obviously, I'm in here with Index Coop Twitter. You can follow us there. You can go to IndexScoop.com. And I've just shared a tweet. You can sign up for our newsletter or you can go to IndexScoop.com slash newsletter. That will keep you up to date on all the happenings inside of IndexScoop whenever we're going to get ready to launch a new product and sort of promotional offers we're giving to kind of our core audience. And if you hold our products, if you hold $10,000 worth of any sort of Index Coop product, you can hop into our Discord and join the Index Insiders group, kind of a focus group where you get kind of behind the scenes access to what's going on with product development. Again, additional kind of promotional offers and sort of anytime we're sort of rolling out a sort of new product beta. And we're going to have some pretty sweet NFTs coming for our insiders as well. Folks that bother to kind of join our guild group, you know, give products feedback. Obviously, this is kind of for our power users. We love to kind of get back and let them share with what's going on at Index. So I hope anyone who's still here is happy to hop in there. And thanks for coming and learning more about our products. And thanks to exponential DeFi for hosting us and working on those risk ratings. So again, a key cog in the DeFi ecosystem to make it more accessible. Nice, nice little alpha leak at the end. Well, that's a wrap guys. We're ending the this today's call. Thanks again.