Bankless - Building A Decentralized Blackrock | Index Coop (SotN 7/27)

Episode Date: July 28, 2021

Index Coop is a DAO focused on making fully decentralized crypto index products, like the DPI (DeFi Pulse Index). Recently, the Index Coop teamed up with Bankless DAO to launch the BED Index: 1/3 Bitcoin, 1/3 Ether, and 1/3 DPI. Products like these make it easier than ever to get some skin in the game, so Do Your Own Research, and learn why the future of finance is decentralized. For this week's State of the Nation, we bring on four core contributors of Index Coop to walk us through it. Live on Tuesday at 11am PST / 2pm EST! ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/  🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/  🎖 CLAIM YOUR BADGE: https://newsletter.banklesshq.com/p/-guide-2-using-the-bankless-badge  ------ BANKLESS SPONSOR TOOLS: ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum  🍵 MATCHA | DECENTRALIZED EXCHANGE AGGREGATOR https://bankless.cc/Matcha  🔐 LEDGER | SECURE YOUR ASSETS https://bankless.cc/Ledger  🦄 UNISWAP | DECENTRALIZED FUNDING https://bankless.cc/UniGrants  ------ 📣 SMARTCON | Register for Smart Contract Summit 2021! https://bankless.cc/SmartCon  ------ Resources: Index Coop: https://www.indexcoop.com/  Announcing the BED Index: https://medium.com/indexcoop/recommending-crypto-to-friends-family-just-became-10x-easier-ccb57ea1903a  Verto on Twitter: https://twitter.com/verto0912?s=20  BigSky on Twitter: https://twitter.com/BigSky_7?s=20  Dark Forest Capital on Twitter: https://twitter.com/DarkForestCap?s=20  LemonadeAlpha on Twitter: https://twitter.com/AlphaLemonade?s=20  ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://newsletter.banklesshq.com/p/bankless-disclosures 

Hey guys, welcome to another episode of State of the Nation. This is the episode where we do a deep dive on the topic of the week. We apply it to the lessons we learn in the podcast and on the newsletter. David, I'm super excited about this episode. We've wanted to get the folks from Index Co-Up on for a while. Now we have the team. We're talking about a new product release. We're talking about all the growth and success they've had since late 2020. We're talking about building a decentralized black rock trillions of dollars in asset capacity here. And this movement with decentralized index funds, index products is just getting started. So David, I'm super excited to dig into today's topic. And today's topic of indices is such a timely one because this is coming after two weeks

after the bed index from the bankless Dow and index co-op, which I think is the best crypto index of all time. I have opinions about this. But maybe that's something that we should talk about in the actual show. And crypto indices or indices in general, I think is something that is really, really powerful specifically in DFI, simply because how easy it is just to compose tokens into an index. Once you have tokens on Ethereum, once you have tokens as ERC 20 tokens, making a smart contract to put them into an index is really powerful. And so there's so much to talk about there. And I'm really excited to get into that topic of conversation with the index co-op team. Yeah, dude. I remember when we first uncovered this topic on the bankless newsletter, it was like 2019 and token sets was just coming out. And I think the article we wrote in bankless was something like in the future money robots are going to be the ones managing your money, right? And look how far we've come. Now I think index co-op has over 200 million in assets under management. They had like close to 400 to 500 million earlier this year. And I think the dream is really starting to come true. And if like you talk to any of your friends in the space who are out.

outside crypto and they're investing, they're likely doing their traditional, their old fai investing through some sort of an index fund, you know, a Vanguard fund, an ETF of some sort, something that is pegged to the S&P 500 or some other stock market index indices. They're just really simple, easy products to use in traditional finance. And they're even better, more composable, more interesting, more permissionless, more interactive in BFI. So that's why this space is super exciting. Well, David, we're going to get into that in a minute, but we should talk about what is new first. You were at ETHCC last week. We just put out a post about the ETHC experience and an epic, an epic podcast, man. I listened to that

on Sunday. It was so cool. It just like cured my FOMO. Thanks for being there. What are the highlights from that podcast? Yeah, the highlights were that there is. so much a new surface area to build in defy these days that people are really overwhelmed with what can be built. A lot of the projects and presentations and talks given at ECC are not talking about theoretical first new products of Ethereum, but a lot of projects and products that are the next iteration or the next evolution of something that we've already talked about. So that was a common theme. Another common theme was everyone was just really stoked to be in person again. And this is something I wrote in the post and not included actually in the podcast. So definitely read

both. Read the post from the Market Monday on bankless and also listen to the podcast. But everyone was really stoked that we are now back in the real world once again as an industry. And I think there's something to say about, you know, we had 15 months where no crypto events happened and then ETHC happened. And we are also now starting to change the real world. At least that was one of my takeaways. Everyone is really excited to see mainstream adoption, but also see this internet native industry actually start to manifest itself in the real world. So definitely don't miss that So there's interviews from Vitalik Buterin, Stani from Ave, Kane, Cooper-Turley, so many fantastic interviews all packed into a two-hour episode.

So if you had FOMO about ETC, make sure you listen to that podcast. That's step one is cure your FOMO, listen to that podcast. I think step two is to go sign up for the ChainLink SmartCon conference. That is a defy conference put on by ChainLink every year. This is a virtual conference. The best thing about this, in addition to the 200, plus DFI speakers and thought leaders that are attending, builders that are attending this conference,

is that it's absolutely free. Free education, free investing on DFI. I attended last year was fantastic. David, you and I are going to be doing a panel this year on EIP 1559. This will be hopefully right after it launches. So we'll have some cool updates, things to share with the community. I'm excited about everyone who's going to be there. I'm excited about the topics, automated market makers.

We're going to talk about Oracle. we're going to talk about layer two. It's really just a fantastic defy education event. So if you missed ECC, do not miss this next event, August 5th through the 7th will be a link in your show notes where you can go sign up for that. So get on it. Man, let me ask you the question. I ask at the beginning of these episodes every week. David, it's that time. I hope you're ready. What is the state of the nation this week, my friend? The state of the nation is we are getting in bed. We are getting in bed with index co-op and with bankless Dow. The bet index got released last week.

Bitcoin Ether, DPI. While it looks like it has three tokens in it, it actually has 16, because DPI also has tokens inside of it. And I think that it is the best crypto-indicy that I think perhaps could be for a really long time, at least a really long time. I'm not going to say forever. But there's very compelling reasons as to why Bitcoin, Ether, and DPI are the best crypto-indisi for you.

for your friends, for your family, and now it's live. And so that's definitely going to be a topic of conversation in today's show with the index co-op boys. But that is the state of the nation, getting into bed. You know, my favorite thing about this, the bed index, David, is it's so damn memeable. Right? It is really memeable. You see that?

Just go to bed. It happens to be a bed right behind me as well. Yeah. There's a bed behind you. I mean, there's like infinite possibilities get into bed. There's infinite possibilities with this meme. So I think this is going to be fun for the community. to dig into in the weeks and months to come.

All right, guys, we are going to be back in just a moment with the folks from Index Co-op talking about everything that they are building, everything on the horizon. But before we do, we want to thank the sponsors that made this episode possible. When you shop for plane tickets, you probably use Kayak, Expedia, or Google to compare ticket prices. So why would you limit yourself to just one exchange when you trade crypto? When you make your trades, you want to make sure that you are getting the best possible price on your trade and that you aren't paying high. gas costs that you could have otherwise avoided. That's why you should be using

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This is a small portion of their team, actually, because their team is vast, it's decentralized, And we're really excited to talk about index co-op today. Index co-op is building the next gen of index investments, doing it in DFI. The old finance world, that's traditional finance, has over $6 trillion in assets inside of indexes. But in DFI-native indexes are just getting started. So index co-op is really a community-led, decentralized, permissionless organization. Their goal is to create, maintain, and drive the indexes. adoption of crypto index products. As David said in the intro, last week, bankless Dow and

index co-op released their newest product, which is called the Bed Index. This is a compilation of one-third Bitcoin, one-third ether, and one-third D-Fi. We're super excited about that. We're going to talk about that. But first, we're going to talk about all about crypto indexes, why they're important, and get into that subject matter. So let me introduce our guests. We have three of them with J.D. Cook is on the analytics team of Index Co-op. We have Simon Judd, business development lead, and we have Dark Forest Capital. He is a Metaverse Index Methodologist. Guys, thanks so much for joining us on Bankless.

It is fantastic to have you. Thank you for having us. We've been looking forward to this for weeks. Oh, my gosh. Hey, I got to ask before we dig in. The Bed Index wasn't the only recently launched index product that hit crypto media waves. I just learned of a crypto index product that Goldman Sachs, is bringing to market. This is a defy index. I don't know if you guys saw this. Did you catch this

news and see what's inside of this thing? Yeah, I mean, I was squinting pretty hard trying to find defy. Yeah. So it's absolutely crazy. For those of you not familiar, this is a tweet I put out yesterday, but the crypto Twitter world has been a buzz about Goldman Sachs releasing a defy index and they're going through the registration process in the SEC. And inside, of this index, the first company listed, the largest portion, is Nokia. The second is Facebook. The third is

Alphabet. All of these are securities. All of these are equities. None of these are defy assets, or even close to defy assets. Not even GBT. Yeah, not even GBT. And this is what a bank is calling

a defy index. I know you guys know better. I know you guys are putting together some crypto-native indexes. But why don't we start JD? Could you tell us a bit about indexes in general? Like, why are index products important financial products for everybody? And why are they so useful in crypto? Yeah, I think just in general, the simplest way is index products take away a lot of the complexity in investing, right? There's, especially in crypto where we're so early in the space and a lot of people that enter the space are unsure where to invest, what's going to be the best

returns. So an index product is a single asset that really gives you exposure to a multitude of assets within a given sector or strategy. That way, you don't have to worry about picking winners. You basically get to ride the momentum of the sector as a whole. So when indexed funds were introduced in the late 60s and the early 70s, they enabled millions and millions of families globally to enter the middle class in a way that simply wasn't possible before that. They allowed people to avoid some of the volatility. They allowed people to invest in a more risk-free way. And what we are trying to do at index co-op is we are trying to bring that same vision to crypto investing to allow millions and millions of families to

very safely enter investing in this space through passive investing in passive management. The fact that we're trying to make, or indexes make investing easier and simpler, I mean that you don't have to pick winners, you don't have to be deeply, deeply knowledgeable. I think that's why sort of the index co-op was formed and why it's so important that we, you know, we can enable people to have access to financial products without that expertise needed. So Dark Forest, let's stick with you. Index co-op has grown to be about 200 million in assets. That is as we're recording.

and it was higher a couple months ago, well, crypto prices were up. But that's phenomenal growth, right? Like just getting started at the end of 2020, I think is kind of when you guys got started. Can you tell us the story, Dark Forest, about index co-op?

So how did it come to be? What's the Genesis story here? Yeah, so our flagship product was launched back in September, I believe, in 2020. But at the time, it was just DPI out on the market. and launched between set and D5Pulse. And the index co-op was actually created at the start of October. And the idea was to form a community around the idea of like growing,

integrating and like enabling these products to spread basically. So yeah, we have all sort of formed around this idea, like I say, of making crypto investing simpler. We use the term like becoming the black rock of crypto as well. And I think that kind of touches on the inspiration of it and where it came from, really. Simon, I'm curious about this question. So what is the difference between index co-op and set token, the set token protocol? Because I understand that index co-op is using some components of the set token protocol itself.

How are you guys related? How are you different? Where does the mission, where does one organization's mission start and the others kind of take things up. Yeah, absolutely. So, you know, I think we're incredibly fortunate to have token sets, Felix Fang, Alex Song, and their incredible team as really, really close partners in the journey as we've launched this Dow.

The way I think of it is it's really like a tripod. So token sets is the baseline technological infrastructure that we were built upon. The methodologists such as D5Pulse and luckily now bank lists are really. the data providers that provide us the data and they're also the distribution platform. And then alongside that index co-op, like we're really the glue that holds all that together, whether that is supporting those products with go-to-market, with marketing, with exchange listings, with all the defy expertise that we bring as a community. And, you know, it is really a tripod and all three legs that tripod make this just incredibly

compelling product. One of the questions I have for index co-op is that you guys don't, seem to have any of your own products. You guys don't build your own products yourself. You seem to tap into, for example, DFIPulse to do the DPI, into bankless Dow, to do the bankless bed index. Talk about the decision to outsource the methodology rather than make that in-house. We actually do. So we have the Metaverse Index, which is a community-launched product. The first of its kind, which I'm a methodologist for, and so is Virtue, who unfortunately couldn't make it onto the call today.

So, yeah, we do. And we've also obviously partnered with these like credible external partners to try and launch products. But the Metaverse Index, like if I can talk a little bit about how that came about, the idea actually went out in October, like went at launch. I got quite excited. I thought this was a great opportunity to get involved in Defi. And so I put the idea out onto the forum. And it actually took quite a few months of pushing and like understanding how,

the index co-op was forming before that actually became something that was then went through the product onboarding pipeline as as you guys have experienced recently with the bed index. So yeah, we do have it and me and verto kind of spun that up in a way where we can still be involved with the index co-op. So we're managing this product on the side. But what we didn't want to do is step away from the index co-op itself and not be able to still contribute and participate in the success of the Dow. So we're what's called community methodologist, which means that we stick around, stick our noses into stuff and try and help the community continue to move forward. So for people who aren't familiar with like index co-op products, I wonder if it makes sense to

just give a high level of what the existing products you have are and, you know, what people can do with them. So I'm showing right now the index co-op like homepage and I see, I think I see five products listed here. So one is called the DPI, which we've made reference to before. Another is called ETH-2X FLI. There's the Metaverse Index that Dark Forest was just talking about. We've got a Bitcoin 2XFLI, and then we've got the BED Index. Can you talk about what these products are aimed at? Maybe Simon, could you just give us like the TLDR for each of these products, like why someone would want to hold them and what they do for an investor looking for exposure? into this asset class. Yeah, absolutely. So the DFI Pulse Index, like I would really think of it as

the SMP 500 of DFI. So it is really the large cap DFI protocols, your Aves, your uniswaps, your makers of the world. And this, like this, when we talk to community members, you know, the thing they tell us is like the first thing they do after they move their ETH to their metamask wallet off their centralized exchange is they buy DPI. because it really is the simplest way to gain exposure to what is at the end of the day, a very, very complex sector. I'm actually, before we do another one, I'm curious as to what it takes to actually get into the DPI.

So I know obviously this is arranged by its market cap weighted in some way, but there is also some entrance criteria, right, for being accepted. And you've got the methodology actually outlines what this is. I wonder if you could just give a quick brief of how an asset. comes into the DPI? Absolutely. So, you know, it has to be a product or a protocol that's been operation on mainnet for over six months.

There's a certain amount of equity that each protocol needs. And then, you know, finally, there's various audits that DFIPolsh ensures that each protocol has gone through. And when taken together alongside the, really the market cap of how everything breaks down, that's really what builds the methodology on their end. So what's, how does DPI become governed, right? Because there are decisions that need to be made. Who and who it is actually governing over the DPI?

Yeah. So that's really the beauty of it, right? So when you think of this kind of tripod that we have of the technology providers, the go-to market, the technology company, which is index co-op, and then the methodologists, each has its own role to play here. And when you think about an index product, you don't necessarily want the methodology to be something that's voted on every month by a community or is really subject to change in that way, which is why we go to trusted outside parties,

whether that's defy polls or bankless, to construct a methodology that essentially remains the same month to month to month outside of those routine rebalances. Okay, so that's the DPI we just mentioned. Maybe Simon, you could just take us through a few of the others. So what is this ETH 2X FLI that feels like I'm going to get some leveraged exposure to ETH? Is that the case? So first of all, just for everybody listening, so the ETH2X fly and the BT2X fly, like these are some of the coolest technological products that are out there in crypto right now.

They spent the set engineering team spent months building these. At a very high level, what is happening is it is a way of abstracting away a collateralized debt position. right so some amount of bTC is deposited in maker dye is borrowed out more is um and then with that die more eth or bTC is bought and it is a tokenized version of that that you can trade and the incredible thing about these products is you can quickly enter and exit leverage positions in a way that simply isn't possible anywhere else in defy right now um and you can enter and exit these positions on decentralized exchanges um pretty much instantaneously and you can do it at scale

scale. And that's really not possible anywhere else in Defi right now. And we're extremely excited about these products. We have a number of other leverage products that we're also in the process of developing and releasing. And we see this as just being a absolutely massive market opportunity moving forward. I think the cool thing about this is that you have turned leverage in leverage into a money Lego. So leverage is now something that you can build upon simply by instantiating the leverage as a actual single. asset in defy. And there are assets like this in the traditional finance world, right? There are assets that are inherently like leveraged gold or leveraged oil. But we haven't really had these

same assets in defy. And there's obviously been like a pretty decent amount of demand because of the market cap by both BTC and ETH FLI. So I think that's absolutely fantastic. Have you seen these assets being integrated as collateral anywhere or any of the money Lego's expressions of these assets being found anywhere else in defy we're in the baby baby step phase of these being integrated as collateral i believe people are doing it very very uh slowly to be fair we just uh we just launched our first rari capital fuse pool with fly as a collateral there um if anybody is feeling adventurous we do encourage you to go over there and um you know kind of play around with that that is that is david like you said that is the future that is kind of

the very cutting edge of what you can do with these products. And it is going to be super exciting to see, especially on layer twos, especially on like Polygon, you know, how these products are incorporated into the broader money lagos of Defi. All right. This is super cool. So so far, guys, we have a token, basically an index token that gives you exposure to DFI, which is the DPI token. Then we have two other indexes that give you leveraged exposure to the crypto monies, that is ETH and Bitcoin, that's the ETH 2x fly and the Bitcoin 2x fly. Now, Dark Forest was talking about this Metaverse index. Simon, could you describe what's in this metaverse index? It looks like it's maybe a compilation of sort of crypto gaming,

metaverse style tokens. How is this selected and how did this come to be? And maybe we can bring in Dark Forest to talk about this. But first, give us the high level, Simon. Dark Forest, Dark Forest and AG know more about these protocols than anybody else in the world right now. I think they've built probably our most exciting index. The way I think about this index is it's really like, it's like imagine in 1995 if you could own an index of Nintendo, Sony, Microsoft, Sega, Genesis,

and then maybe throwing Pokemon in there and the Pokemon trading cards as well. It is one of the coolest things we have out there. It's been, you know, I think everybody in the community is incredibly proud that they were able to put together this awesome index and launch it. I am a huge MBI holder. I think probably everybody in our community is. That's my pitch for it. I'm sure Paul can get into the details even more, though. First of all, that was a decent effort, Simon. You've clearly been doing your homework. So yeah, bonus points for that. In terms of like how it came about and a little bit more about the methodology, I guess. It was like I say, I kind of put a proposal out back in October now. And having sat in my mum's basement all year and seen the like the trend of stuff moving online, whether that be like socializing, entertainment, business, even like sports starting to either be streamed or like digital.

versions of sport taking place. I thought there's something that can be done here and there was a lot of hype around NFTs at the time, but I figured the trend was going to be a lot broader than that. I mean, this term of metaverse to me is going to be like an emergent reality that blends our current physical and digital realities that we see at the moment. So the idea was how can we capture that trend that's been accelerated by COVID as everything's sort of moving online. that was what gave birth to this product essentially. And then AG came along and he has a decent financial background. So he kind of tapped me on the shoulder and said, look, I think we can do something a little bit clever around the liquidity because at the time a lot of stuff was low liquidity.

So it's market cap weighted, which we then square root, which kind of reduces the volatility during rebalances. And then we've also got a portion that uses aggregate liquidity. And then we weight 25% by that. So we're taking partly the market cap and partly the amount of liquidity available to really just try and protect ourselves in the early stages of this product as we watch this market start to grow. Dark Forest, when you talked about the liquidity and wading by liquidity, that's news to me. That's actually pretty cool. I'm assuming you're actually tapping into on-chain data for on-chain liquidity, or are you also tapping into like liquidity on Coinbase or Gemini or other centralized exchanges?

Yeah, this is all decentralized. I think we probably wouldn't be welcome on this podcast if it wasn't. So we, if it ain't bankless, get out of here. That's how we do it. We don't negotiate with centralized entities. Well, they are good for bridges. We have to have our Fiat bridges. But guys, what I love about this product assortment is, like,

it solves real problems that investors have when they're entering the space. As you were saying, Simon, like the first thing people do when they get their they're at custody of their keys and they go bankless is they might buy something like DPI, right? People ask all the time, okay, which DFI token should I buy? And this gives an easy answer to this. Just buy the DFI pulse index. Then you don't have to worry about it, right? MVI does the same thing only in the metaverse. You just buy this asset and you have exposure to all of these up and coming metaverse style investments, community type investments. That's also what we're doing with BED, which is basically, you know, kind of the bankless thesis synergized into one token where you get

the crypto monies, you get Bitcoin and Ether, and you also get exposure to DPI. So you don't have to do anything. Just go into crypto, buy this asset and, you know, spend the rest of the time, not worrying about price action, but like playing with the cool crypto ecosystem that is before you. But like the common theme across all of these products is you buy it and you set it and forget it, like passive index investing, and you guys have brought that into crypto and made it composable. J.D., I'm curious about this. Tell us about the growth story here of some of these assets. So I think right now on the NXCOOP website says there's $195 million or so diversified across these assets. So how has it grown since, I guess, September 2020 when you guys launched?

and what are the most popular indexes so far? We launched DPI in September, and the next product didn't actually come until, was it late March, early April when we launched Fly. So we were 100% DPI, but since that launch, DPI now is only about 60% of the AUM, where ETH2X Fly now has about another 20%,

and the remaining have the remaining three, products have the last 20%. So we've seen really, especially with ETH2X fly, we've seen really explosive growth in unit supply since April. And Metaverse, especially the last month, has been growing weekly, you know, 7, 10, 12% in unit supply every single week, which, you know, week over week growth like that is really awesome to see. DPI, yeah, since,

even since, you know, we've launched those other products in March, we've seen another, you know, 100% growth in DPI as well. So we're growing, growing really quickly and it's only going to accelerate as we as we bring more products to the market. J.D., we're showing a Dunea Analytics dashboard. I'm not sure, you know, someone from the bankless team, Doug this. Actually, you're the author of it. Okay. So is that you right there, J.D.? That's me. All right. So is this like a KPI dashboard that the index co-op team uses internally in the DAO to sort of measure itself and to self-organize? Exactly. Yeah. So this main dashboard, these are our core, we call North Stars and core KPI, so things that we try to orient ourselves on. We report on them every week

in our meetings and keep track of them. So the key ones being, you know, address exposure, being focused on what users are holding our products. Unit supply is just how we measure demand of our products in the market. And the other one I want to touch on is unincentivized unit supply, which you can find in there, which especially for index products, the whole point of an index product is that you don't, the product itself, the methodology, the value proposition of the index is incentive enough for you to hold it rather than half a lot. to be paid and whether it's liquidity incentives or staking incentives. So our goal is for these

to be self-sustaining products because they're valuable in and of themselves without external incentives for holding. Those are some of the core KPIs we focus on. Yeah, I wanted to bring attention to this one. So this is index co-op address exposure. So is it the case that you have? It looks like just over 20,000 different eth addresses that hold an index co-op product. And of course, an eth address, as listeners will remember, that can be an individual or that can be some sort of capital pool. That could represent a Dow, that could represent an entire hedge fund. It's like a bank account, I guess, would be the analogy in the traditional finance space. Why is address exposure important to you? Does that represent sort of the, I guess, the distribution across different stakeholders and parties? Is that why that's important? Yeah, I think it's important for this is, I would say this is a high level metric for sure. And it's important, the reason why we have it is it's important for us as a Dow to be really intentionally focused on users. And it's hard, like just for the reasons you said, it can be hard because we don't know if one address equals one user, if three addresses equal one user or if it represents a Dow or whatnot. But we have other metrics and other dashboards that try to break that out. So we look at addresses by their their amount of exposure they have by when they signed up. So we really try to dig in as much as we can and we're in the process because we want to be

user-centric. The whole point of our Dow is we want to pump out multiple products a year and everyone should have strong product market fit and user fit. And that's what we want to stay focused on. Awesome. You know, one, Ryan, if I could just jump in one quick note here is this is really like what JD's built here. This is really one of the best day dashports in DFI. And I think if you spend a lot of time on these dashports going through it, you recognize like this is really the future of financial reporting. Like this is where this is the 10k. Many, many companies, 100%. And like this is kind of the cutting edge of it. But five years from now, there's going to be a significant number of companies in S&P 500 that report their earnings using Adun Analytics dashboard. something like what JD is built here.

Like that is the future we are moving towards. And once you start playing around with it, you really recognize the power of these dashboards and the power of on-chain data. Well, it's so cool. This is powerful. I'm glad you brought this up, Simon, because this is powerful for DAOs themselves

because anybody in the DAO can go tap into this data and start measuring it. This is powerful for analysts who are trying to figure out, okay, what is index co-op really doing? And how do I look at the value your potential future for index as a token. It's valuable for other partners who want to do something with index. It's also valuable, and they don't appreciate this yet, guys, but they will.

It's valuable to regulators. This is insanely valuable data to regulators because we're moving from a system of like forced disclosures, right, where organizations and corporations have to be pushed into you, you know, from a regulatory perspective, disclosing things every quarter. And it's sort of selective in terms of what they can disclose to something that is completely open. Like, everything is on chain. All of your products, all of your revenues, all of your fees, like all the way down to kind of the code and who manages the code, which is like all public. It's all on chain. I wish regulators could figure this out because there's some regulatory flood right now about

defy. But like, show them a Dune Analytics dashboard, right? Like, what more information do you want? This is like, this is way better than any 10K I've seen. It's actually digestible, understandable. If you don't like it, you know, change the data around, build the graphs out in a different way. They have access to all of this. This is why we call it open finance people. Sorry, rant over. But I'm glad you mentioned that, Simon. That actually brings me into my, the next question I wanted to ask anyways, is how are indices built on DFI? fundamentally different than indices built in traditional finance. And one of the answers that we just gave is, well, there's more data, there's more transparency,

there's more reporting. But what else is there to talk about with why indices on defy are so powerful and how they're meaningfully different than the indices that we know in on our Robin Hood to the accounts or traditional brokerages? J.D., do you want to take that one? Yeah. I'm thinking. So if anybody else, Simon or Paul, have a better answer in the meantime.

Go ahead. Yeah. So I think the thing, go ahead, Park. Yeah, go ahead, Paul. Yeah, I was just going to say that the main thing is, like, I think you have the ability to do very similar things, but it's all much cooler in DFI because it's all self-sovereign. So we have the ability to execute meta-governance,

for example, using the underlying tokens in DPI. And I don't know anybody who holds an Amazon share that's ever voted on anything, you know, Amazon-related. Whereas if you're a D. DPI holder, you're not only holding the tokens in your wallet, or if you're an index token holder, sorry, you can, like, use your index tokens to vote on an RBA proposal, for example. And we can use the amount of RVA tokens held within DPI because of the way the contracts work to actually vote on RVA proposals. So as an index token holder, you have like this extra superpower called meta governance. And that's one thing. Then we've got stuff like intrinsic productivity, which at the moment, moment we're still kind of talking about and trying to figure out because it is so new. But what we can do there is start to look at ways to make these underlying tokens productive. So could we have a contract, for example, that you deposit DPI into, we break it into its

constituent parts, and then you stake your Wi-Fi in the Wi-Fi, Yeran governance portal, for example. So you can then start to yield on your assets as well. And, like, yeah, I mean, compare that to holding, even holding crypto in a Robin Hood account. you can't really do anything with it. There's just so much more composability and interoperability with like ERC token, ERC 20 token. So comparing a on-chain index, and I firmly believe,

and I think everybody index co-op believes it's like all ETFs, all index ones are eventually going to be held on-chain. And comparing an on-chain index to an off-chain like normal ETF, it's really like comparing like a 1960s like Honda Cord or 1970s Honda Cord to like a 2021 Tesla S, like model s right like they're both cars right they'll both like get you to the grocery store but they are very very different technologies and one will do it in a far far more efficient way and you know be able to do it in just an extremely efficient manner in a way that you know the

prior technology just can't and on top of that like you can use our indexes for collateral you can borrow against them you can lend against them you can you know at any moment return those indexes for all of the underlying. And like those that that a level of compostability is just simply not accessible in normal index funds, normal products. And like, yes, the gray scales this world are entering like, or Goldman Sachs, right, like the crypto ETF, the defy ETF. But like on chain indexes are just, it's just an entirely different world of efficiency

and capital, of capital efficiency that is just not accessible in private, in previous types of funds. Yeah, I feel like so, like once you go into this world and you start doing things with defy tokens, things like these indices tokens, and then you go back and log back in, I don't know if you guys have done this, but log back into your like your brokerage account, like your Charles Schwab account or you trade account. And you're sitting there looking at the ETFs you hold there. And you're like, my God, what do I do with these things?

I log in and visit them in like jail, you know, once a month or whatever. but they're stuck here. They're not doing anything for me. They're completely trapped. And you compare that to like the DPI token, which you can use anywhere else in DFI. Right? We're talking about governance.

But you can also use this as a super fluid collateral to back a loan. I mean, that's sci-fi stuff. That's crazy stuff. And only until you start to experience like the DFI side of it, do you actually see how all of your other ETF assets are basically in like brokerage jail? I'm curious about this, the index curation process. And Paul, Dark Forest, you're talking about proposing the Metaverse index.

I'm curious what that process is like. So if someone like you has a good idea, wants to be a methodologist for index co-op, what's the process for getting an index submitted, approved, and created? What does that look like? How long does it take? Yeah, that's a good question. And it's something that's being approached by the community at the moment to try and improve. Because I think that we've found some sticking points.

Like we're not perfect with it at the moment. But basically it comes down to coming up with an idea and whether that's something completely novel, like the fly series, where it's, you know, abstracted leverage, basically. Or if it's a really powerful theme like the DefyPulse Index or the Metaverse Index or obviously bed. So basically the first step is to approach our community and that takes place on the forum. So you put a post out on the forum and say, here's our idea. We have a template for this. So any potential methodologists will follow that template and they'll say, you know, here's our potential addressable market.

Here's how the methodology will work. Here's how we're going to approach, you know, integrating it. Here's what the unique parts of it are. And then what the co-op community does really well is they'll come out onto the forum and say, okay, we like this or we don't like this. We've seen this work. Here's the data. Very often, you know, we're going to pester JD to get some more information around stuff.

And then we'll try and refine that post effectively. And then we have a couple of like formal gateways. So assuming that the feedback is fairly good and the sentiment is positive, we can have a, first of all, a community call, which we did be using. guys, which was great because everybody got to feel like a rock star and be on a call with David and Ryan from Bankless, which is awesome. And that's another opportunity for the community to learn a bit more about what the methodologists offer, what they're thinking about the product. But assuming everything's positive there, we go to DG1, which is Decision

Gate 1. And that's the first actual vote where index token holders can have a say on a product. And at that point, excuse me, it's basically just to gauge the sentiment. So there's no quorum as far as I remember, but it's just to say, are we in general agreement or not? Once that goes through, then there is a product team that basically dives onto it headfirst and does a deep dive and says, okay, they said here's that this is what the addressable market is. Do we actually see that coming true? What kind of reach do they have? What's the engineering lift in the background? you know, what's it going to take? What does the fee split look like? And what's the return on

investment for index co-op? So all of those hard numbers go into a prioritisation rubric. And then that helps us to prioritize our product pipeline. From there, it then falls into, once it gets to the, you know, the end of that pipeline or the top of the priority, it will go to DG2, which is the final vote. That does have a quorum requirement. I think it's 15% has to vote and 60% have to be in And if you pass that, you get to launch your product with index co-op. So index co-op has been praised as been one of the most fluid and efficient and streamlined Dow's that's out there. And that was definitely my experience when Ryan and I were going through the whole Dow process

with the Bet Index. But I have a critique. I want to pay devil's advocate here, is that this industry runs on permissionlessness. And it seems to be that index co-op is really careful and really methodical about the indices that it wants to create, but that means that you have to actually go to the index co-op and ask for permission to make an index. And so what about, you know, this, the average person who wants to make their own index for their own purposes? Is this something that you guys have your sights on, maybe in the roadmap for index co-op, just making an index a little bit easier?

Or what's the social contract of the Dow with how it approaches to opening or lowering the gates or the barriers to actually making an index. Yeah, I can take that for a second. I think the vision is to get to a point where, whether it's an incubator style or whatever it looks like, the vision is a good point where anybody really can come in and create an index. And that's actually possible, you know,

with token sets on its own, without the index call up. You can create an index product and try to drive a UM. And really the index co-op is would be, is like thinking about like a partnership with a complete distribution platform engineers, product people, marketers, business development. So the co-op right now is we're really only eight, nine months old, even though that growth has been really fast. You know, we're focused on launching big products, products that are going to really win the

market because this market is a winner takes most market. And we need to be focused on winning the market. And at the same time, improving our processes, so it becomes easier and easier to work with the index co-op to launch products. And I think we're very aware that we need to improve those processes over time. And we're focused on that too. Hey, Simon, I'm curious your perspective on this, but like putting your biz dev hat on. So JD was talking about, you know, adoption, right, growing this as big as it can grow. And it's very clear that you have mine share among sort of the crypto natives, the defy natives.

for index co-op products, right? Like, check that box, you know, that's only going to grow. Well done. I see two other areas of growth. Like, one area of growth is centralized exchanges. So is there a way to get these assets listed on centralized exchanges? When we had Jim Bianco over, he was just talking about, like, he's done, gone into that he's a, you know, a fund manager, CNBC, contribute this sort of thing.

And the question he always gets when people get into crypto, they'll create their coin base account. And they're like, oh, okay, how do I buy the defy token now? Like, where is that? And I'm like, well, that's DPI. How soon, like, is there a world where something like DPI gets embedded in these crypto exchanges? And if so, how soon is that world coming? Simon, what do you think? Yeah, Ryan, so that's a very interesting point that we've been.

We've really navigated over the last eight months. So I think just for context, I think it's good to understand. A lot of the exchanges that centralized exchanges are still very much operating from like a 2017 ICO, right, where they are very much built to keep out the ICO tokens and then screen, you know, a certain number of tokens based on volume to allow onto their exchanges. What we're starting to see with a lot of the leading exchanges, is they're really starting to transition their business model from, like, like a closed garden approach that really characterized centralized exchanges from, say,

2017 to 2020 to more of an open garden approach like what characterizes a uniswap or a sushi swap. So we're A in the middle of that transition. And I think all D5 protocols right now are feeling the pain of that, right, as we're like struggling to get each of these different products, you know, DBI, MVI, bed, you know, the tokenized leverage products, like listed on centralized exchanges. Like, we're very much, like, working through that. And, you know, we are in active communication with several of the top tier centralized exchanges right now. And, like, I think there's going to be some extremely solid movement there over the next couple months with really our full list of products. And I think the other segue on top of that is the index co-op

and our products, like, we're going to be, because of our strategy of partnering with really blue chip methodologies such as bank lists such as defy pulse like we're going to be the first choice index partner for major institutional capital like that is where we see ourselves as a protocol that is where we see um you know these massive in these massive funds that are funds that are about to flow into defy like we see them flowing into um dpi into mv i into bed because the reality is like we think of institutional capital is super highly sophisticated which it is but these like these major banks these major financial institutions, like they don't have the defy knowledge that we've built over the last two years. Like they are just as, you know, just as blind in this space is the average consumer

and they are going to want exposure through index products. They're going to need it. And, you know, a big play we're making an index co-op is we want to be the landing spot for all of that institutional capital. This is so cool, right? It's like at some level, hey, we got to save them from the Goldman Sachs defy ETF, right? Because like that's what's going on. And even, you know, God bless Grayscale, love their efforts, high management fees, you know, and like, and you don't actually own your own crypto assets. So like, I'm curious because institutional defy has sort of been a theme. We've seen compound treasury release sort of an institutional product, AVE with their AVE Pro product, which David, that's called something else, isn't it? It's not AVE Pro. AVEARC. AVE

product. So how close do you think we are to, for institutions to be able to directly buy and hold index co-op products like the DPI or bed? Are we far away from that? Do the exchanges need to integrate that? Or is there a world where they start buying before these things are even listed on exchanges? So up to right now, and this is a common misconception, so up to right now, what institutional defy has meant really up until like the present moment is institutional participation in staking. Right. So there are numerous funds in Switzerland, in Europe, in the United States that are very active in defy staking. So, you know, a number of top hedge funds are recognizing or have already recognized that, hey, like I can beat my, my expected return just by, you know, either playing.

in stable coin pools or staking, right? And I can beat the return that I would get investing in like a more volatile asset class, more volatile like traditional equity asset class, right? So that transition, that evolution has like, the boom has happened. Like maybe we haven't seen the mushroom cloud, but the boom has happened.

So what we're starting to see right now is these funds that have entered the space and have been very active in staking. They've been very active in. active in LPN, you know, stable coin pairs, they're starting to really expand their horizon of how they think about defy and how they think about investing in the space. And really, like, the next step in that is, is them directly holding actual governance tokens, holding indexes like DPI. They're very, very close to it.

And, you know, what we're seeing right now is, you know, really over the last year, the crypto space, the defy space, it was dominated by about 15 to 20 kind of what I would call defy native funds, right? Like your three arrow capital, your Alameda, some of these. And that is slowly transitioning, right? Those funds are still dominate a large sector of it. But that is transitioning to more traditional venture capital funds who are entering the space with a specific thesis of holding governance token long term and treating, you know, these early states defy protocols like anything held in DPI or an XCO-up like they would a really like a world-class series A funded startup, right?

Like that is how these institutional capital is starting to treat governance tokens. And that is an incredible shift. And it is going to be an incredible accelerator for widespread-documented D-5 because, you know, these previous funds that just, you know, they traded and dumped, right? that was a very bad reputation for VCs. What we were transitioning to is major VCs holding these governance tokens as long-term investments that they expect to develop and grow over the period of decades. And that is so incredibly excited for DFI and where we're headed.

Guys, this has been a fantastic exploration into the world of Index Co-op. And like I said earlier in the show, Index Co-op has been praised for being one of the most, you know, streamlined and fluid Dow's there is out there. And so I really want to pick your brains about how Index Co-op, how it dows. What does it mean to Dow from the index co-op perspective? And I also want to get into the bed index because I think there are some really interesting things about the bed index that are worth noting. Notably, the fact that an index co-op product, DPI, is actually in another index co-op product bed.

I think that's something I want to parse apart. But before we get to the second half of the show, I want to take a moment to talk about some of these fantastic sponsors that make the show possible. Living a bankless life requires taking control of your own private keys, not your keys, not your crypto. That's why so many in the bankless nation already have their ledger hardware wallets, which makes proper private key management a breeze. But the ledger ecosystem is more than just a secure hardware wallet. Ledger is the combination of the Ledger hardware wallet and the Ledger Live app. And if you're used to seeing all of your crypto services and favorite DAPs all in one place,

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Go to ledger.com, grab your ledger, download Ledger Live, and get all of your D-Apps all in one place. Bankless is proud to be supported by Uniswap. Uniswap is a new paradigm in asset exchange infrastructure. Instead of a cumbersome order book system where trades are matched with other humans, uniswap is an autonomous piece of software on Ethereum, which is what Ryan and I call a money robot. No human counterparties or centralized intermediaries, just autonomous code on Ethereum. input the token you want to sell and receive the token you want to buy. Something brand new in the Uniswop ecosystem is the Uniswap Grants Program is now accepting applications for grants. We have been saying this for a while and we'll say it again.

Dow's have money and they are in need of labor. If you think that you have something to contribute to the Uniswap Dow, apply for a grant to Uniswap. Just look at the size of the Uniswap treasury. It's almost $3 billion. This mountain of capital is looking for labor. Do you have something of value to contribute to the Uniswap Dow? No matter how big or small your idea is, you can apply for a Unigrant at Unigrant.org and help steer Uniswap in the direction that you think it should go.

That's exactly what we did to get Uniswap to be a sponsor for Bankless, and you can do the same for your project. Thank you, Uniswap, for sponsoring Bankless. All right, guys, we are back with the team from Index Co-op. And in the first half of the show, we went through all the things about indices, both in Tradfai and Defi and why they are so cool. And the second half of the show, I think I really want to get into the actual Dow side of Index Co-op.

The Index Co-op is a Dow. And my experience with interacting with the Index Co-op is they're one of the most streamlined DAO's in existence. And so I want to ask about the popology or the org structure of IndexDAO. How is Index Dow organized? Yeah, I'd say at a high level. It's mainly between like working groups and our, funding council. But those things didn't exist in the format that we see them today nine months ago.

All of this stuff has kind of like ebbed and flowed as we've as we've scaled. One thing I should say is that definitely like set protocol are a very switched on an organised bunch and they started us off on the right foot with our like our weekly calls. Felix I remember encouraging like one to ones and just really embracing like this group of decentralized cats that you're trying to heard via Zoom calls like it's just it's very complicated to do but the way that we set up our structure at the beginning I think has really helped us so in terms of the working groups that was put forward a few months back and the idea behind that is you basically set out and anyone can do this these are emergent so anyone can come out onto the forum and

say, I think the index co-up needs a business development working group. And they propose a time box for it. So let's say a quarter, that's what we've kind of ended up doing. And so Simon will come out and say, we need to do some BD. And we're going to do it for three months. Here's how many people are going to be involved. Here are the initiatives that we're going to target. Here's how you can hold us accountable. Make sure that the community can hold them accountable to it. But then what we have on top of that is the funding council. So the funding council started as a group of like set members on a multi-sig that were able to fund these things at their discretion. And what we're trying to do now is part of like autonomy discussions in the co-op is hand over the power of that

council to the co-op and make sure that it's co-op members on the multi-sig and co-op members like advising the decisions there. So it's been quite a hot topic recently, especially around like the idea of autonomy and it is a progressive like decentralization effort that we're going through. But I think we do owe a lot of it to set. We then owe a lot of it to the community members that have like picked it up, run with it and iterated it as well. And so yeah, hopefully you guys had a really good experience as you came through the process with us. So if you add all of the working groups together, is that index co-op in its totality or are there other parts of index co-op that are outside of the working groups as well?

Yeah, so that's a really good question, actually. So what we were doing as the Funding Council was kind of basically giving out rewards to contributors. And what we've moved to is this model where, because the three of us on the council, we're basically too far away from the coal face to the point where we couldn't reward people accurately because we couldn't keep track of what 60 or 70 people were doing in the Dow. So we've pushed that responsibility down to the working group leads. So they're requesting a budget. They're saying, here's the work that I need to do to make this successful.

They tie it to our KPIs. And then here's how much money I need and here's the contributors that are going to do that work. So the funding council just basically requests a budget to fund that. There are still some bits and pieces that fall between the gaps because obviously we can't account for everything in all of the working groups. We might have a really good idea or something in defy might change. to where we have to, you know, react to it and a bunch of work gets done that needs rewarding. So there will always be the funding council to kind of like fill those gaps as well and make sure that contributors are rewarded across the whole Dow.

It's so fascinating, guys, because I feel like every Dow is trying to figure out how to Dow right now. And they're having varying degrees of success. But what we see in Index Co-op is a model of success. Like you guys seem to run, at least from the outside looking in, like a well-oiled machine. And so I'm super impressed with that. I think you've already shared a few of the things that you've learned along the way. But maybe, me, I'm curious just to put it in a question. It's like, what, what are the lessons learned on Dowing that you have to like pass on to other Dow's? What are the things that Dow's should do? What are the things they should avoid doing from

your experience? J.D., let's start with you if you have some thoughts on this. Yeah. So, I think one thing that's becoming apparent now, so this may blend into more kind of like what we're learning, because we're definitely learning right now. I think we are trying to push the envelope and that's great in a lot of ways. And I think the community has been awesome to realize like we're in a learning process and we're figuring this out over time. But like Paul mentioned with Sets leadership from the get-go enabled us to make the right strategic bets, right? On DPI and on the fly series. But over the last few months as we've launched new products, we've grown our community, we're learning how do we maintain like high level strategic alignment and still make strong bets and focus ourselves when we have eight, 10 working groups. And I think we're learning what those structures look like. Right now it's the funding cancel working groups. We just launched an autonomy working group to explore this with other stakeholders more deeply.

And I think that's the challenge I think we're facing. So as other DOS think about it, like, that's the challenge maybe to look forward to is as your community grows, it's harder to keep focus and to focus everybody on the same few initiatives that you and the big bets you might need to make as a young organization. What do you have that start for us? Yeah, first of all, it just popped into my head that the engineering. working group, which is a massive one that I missed off my list earlier. I was going to say that something that I came across that I mentioned on our forum was this, this, like, thought model or this, like, hypothetical situation, and it's called Chesterton's fence. And I've seen people on Twitter and from other Dow's kind of talking about this. And what it is, is imagine two people

are walking in a field, and they come across a fence or a gate, but there's nothing either side of it so you could easily quite easily go around it. So one person says to the other, what's this doing here? We should just get rid of it. And the other guy says, well, as soon as you can tell me why it's here, then we can get rid of it. And so I think what we're seeing in Dow's is a lot of people come in and I did the same, very naively thinking that decentralization solves everything. Unfortunately, it doesn't. You have to have a group of like high context, highly accountable people to make decisions and move stuff forward, because otherwise you get a lot of friction, a lot of delay. So I think we've found, as JD said, like set,

kicking things off really helped us. And now we've got to a point where we really quite rapidly need to move to index co-op, having the power as either the funding council or some other thing that we haven't yet had. And we see this at Synthetics with their Spartan council as well, where you have potentially an elected group of people who are empowered to make decisions quickly. And I think that's a really powerful lesson learned because the longer you try and hold on to like voting by committee or decision by committee, the more you're going to slow yourself up potentially. Yeah, that's great feedback, Paul.

Thank you for that. Simon, what would you add? What are some lessons learned from Dowing so far? So I think the mistake people make is they think decentralized means leaderless, right? And decentralized protocols and dows thrive on the strength of the leaders they have. And index co-op, you know, from day one, we have built this culture of ownership, a culture of trust, a culture of integrity, a culture that really embraces and values strong leadership. Like J.D. mentioned, like, he was like, hey, you know, index co-op really values analytics. We have six or seven people like working on analytics.

It's like, no, J.D. Cook is a great leader. and he has, you know, managed to get this awesome team of eight or ten people working on analytics. And, like, Paul is, you know, being, or Dark Forest being very humble saying, oh, you know, we have this council, this direction. It's like, no. Like, Dark Forest, you know, helped put this together and, like, drove it, made it happen. And, you know, when I think of what makes doubt successful and is it's people taking ownership. and then it's embracing Dow's when it's high stakes. Like anybody can be like elephant Dow and have a multi-sig

and kind of be hanging out with your buddies and it's like whatever. But what really differentiates a great Dow from all the others is like can your Dow operate when the stakes are really high? And at Index Co-Up, I mean, this is a business on the blockchain. Like we handle hundreds of millions of dollars. The stakes are always very, very high. And we have put a tremendous premium on leaders who can, can, A, handle stakes when they're that high and then execute an extremely high level.

That's fantastic. And I think it's really interesting to note that when you look at all the other like DAOs in the space, like AVE in theory is a DAO, but you know the name Stani. And like Uniswap is a Dow, but you know the name Hayden. With index, there doesn't really actually seem to be one like figurehead, but there does seem to be like many, many, many leaders moving each one of these working groups forward. So I think that's pretty cool. One of the last few questions we have as we come to the end of the show is what are the products that are in the pipeline that are not yet to not yet released out of the index co-op that are really that excite you guys. Are there any teasers that you guys could give us about future index co-op indices coming out of the out of the Dow? Before we do products, can we do, can I just do a shout out to two initiatives that are happening?

Absolutely. Please do. Yeah. So Index Co-op, we were launching the first Dow internship program. It is happening. It is kicking off August 9th. We have seen, I believe, over 200 applicants so far to intern an index co-op. We want the next generation.

We don't want them to just land on 400, 388 applicants so far. Like, if we want the best and brightest to come to index co-op, we want them not to say, I'm going to go work at Google or Facebook. We want them to say, I'm going to go work at D-Fi. And we're very committed to making that happen. And I think the other thing I also want to give a shout, out to is, you know, index co-op has really made a commitment to be a leader when it comes to diversity and inclusion in DFI. I would say, you know, over half of our core team members,

our mentors for C-256, we have an incredibly successful women in index co-op community call that happens every Thursday. We have 20 plus women every Thursday from across DFI, from across crypto, coming, helping out with the co-op, learning about it, getting involved. And like those are two initiatives that I'm really fired up about. And I think as defy grows, like this can't just be a movement for, you know, a thousand people or 2,000 people. Like it has to be everybody. And we have to build structures where everybody in the world can feel comfortable entering these DAOs, entering those organizations and really pushing things forward. Yeah. And that's an answer to a question that I wouldn't have known to ask. So, so thank you for

that perspective, Simon. But also hope back to my. original question. What other indices are coming down the pipeline that we can all get excited about in the future? I can touch on a couple. We are just about to vote on the data index, which is a thematic index to give you exposure to data economies, on-chain data economies, such as graph protocol, OSHA protocol, even like BAT and Orchid. Like there's this chain link. Yeah, this chain link. Yeah, sorry, I should have made me start with them. Yeah, this whole idea. If you don't include them, by the way, J.D. Yeah, they'll absolutely let you know. So, I mean, it's just this, this theme of web three data economies capturing a lot of these, which are really interesting tokenomics in a lot of them, these utility tokens into an index.

we have proposed going to DG1 the pay. You can see these on our form, the pay index, which is a yield bearing stable coin index. So nine yield bearing stable coins, trying to maximize your risk adjusted returns on stable coins, which could be very powerful for both Dow's and individuals in their portfolios. And then the continuation of the fly series, inverse ETH is one of the next one coming through. so allows you to get inverse exposure to ETH movement.

Am I missing any other ones that are close to? We're calling that the down only index. What would that mean if I'm holding inverse to ETH? I'm just curious. That means like when ETH goes up, you know, I'm going down, I guess, and vice versa. Exactly. So, I mean, this is a continuation of our. are focusing on a market of like really sophisticated traders, right?

These products, these leverage products aren't necessarily meant to be buy and hold products like our thematic indices are. These are more for people that are moving in and out of positions relatively quickly, and we are building out a series that will cater to this market. That being the next one. So my next question is actually about the bed token, the bed index, which again came out of the bankless Dow. excited about it. Like I said, the best crypto index that I think will ever come out, but, you know,

it's very early, so maybe I shouldn't say that too soon. But Paul, as the methodologist behind MVI, I have a question about the nuance in the bed index because the D part of bed is, of course, DPI, which is a product out of index co-op. And so there's an index co-op product inside of bed index, which is another index co-op product in partnership with Bankless Dow. How did that change, did that like throw a wrench in the in the in the in the in the in the in the in the in the gears about how you think about the methodology behind the bed index or what how did that change what you were really kind of thinking about with web, um, uh, index co-op products? Um, not as far as I'm aware. I think from for me personally,

I thought it was quite interesting because I kind of see, uh, the bed index is like a growth hack for DPI to an extent. So the fact that we've, we've got included in there and we've partnered with you know the bankless Dow and yourselves who have fantastic reach and great educational materials i think putting those two things together um helps us like really spread the word about you know what you can do in defy and and for these brand new investors to the space like it's a perfect product really for those kind of people so yeah i don't think it as far as i'm aware like i say i don't think it was any um spanners in in the but it's just a really like a really advantageous thing to do and then it's going to help us like

spread the word about DPI and DFI more generally. I think the cool thing about what you can do by turning your own tokens into another index is bankless Dow partnered with index co-op to produce the bed index, but there's DPI inside of the bed index. And so in a way, there's like an unofficial money Lego relationship between bankless Dow and and Defy Pulse, which has no other connection other than the actual, than what's in the actual bed index. So I think that it's like this unofficial relationship that I think is pretty cool. And that very much goes to what Kevin Awaki was saying over at ETH, ECC, when he talks about how

all dows will all rise together and fall together. And putting the relationship of a Dow on chain allows other Dowell to just tap into the power of other DAOs. I don't really have. I don't really have a question there, but if anyone wants to riff on that, I'll open the floor. I mean, I think like, I love that point. And, you know, something, it provides a synergy with multiple partners trying to push everybody forward, just like you're saying. And I think one of the things I'm really excited about with bed is we talk about this like new new crypto user retail market. And I mean, I've already had multiple people on Twitter or just text me and be like, hey, what's this bed? How do I, bed token? How do I get in?

into it. And I'm really excited to see two really passionate communities at Bankless Dow and Index Co-op really try to focus and innovate on how we start to penetrate, you know, new crypto, like new adoption, incoming crypto users, investors. And I think that's like we've talked about the bed being this Dow to Dow partnership and the uniqueness of that. And I'm really excited to see that play out is how we come together as communities to really drive a new adoption through bed. That's my hope for the product in a large part. One of the things I've been thinking about while on this call, and I want to run this idea by you guys because it might be crazy or it might be genius, one of the two, is all of the

indices on index co-op, they're supposed to be quality, right? You're not supposed to be throwing crap tokens into these indices. Each one of these indices is made with purpose made with intent, which means there should be quality in every single one of the, the indices. So have you guys thought about the index co-op index, which is just an index of all the products that you guys have ever created? Has this been like passed around in back channels? Have you guys thought about this? It's been thrown. There might even be a discussion going on the forums right now with a couple ideas around indexes of the, I think somebody called it the coop, that would be the ticker

and it would just be every index we launch gets added maybe like thematic indexes or simple indices but it's definitely been thrown around it. I don't know how far it is in the process but you're not off on that idea. Guys this has been a blast.

Thanks for hanging out with us. I want to end with this question because we titled this episode building the decentralized black rock right. And so So, you know, decentralized Black Rock, that is quite a, I mean, I don't know how many trillions they manage. It's got to be like six trillion.

Excuse me, there's six trillion in ETFs. I don't know how Block Rock is, but it's in the trillion. I think it's close to the six to ten trillion, right? So what's it going to take for Index Co-op to become the decentralized Black Rock? Like, what's it going to take to get that level? Are you guys serious about that or is that sort of a tongue-in-cheek sort of joke? What are your thoughts, Simon? I can take that. So in the next five years, index co-op is going to be the largest crypto asset

matching platform in the world. Over the next 10 years, we will be competing directly with Vanguard and BlackRock for the ETF space. We firmly believe that we are moving to a tokenized world. All the traditional securities will eventually be tokenized. And we are, you know, laser focused on being the protocol where that happens. Index co-op is going to be the single largest crypto asset management platform in the world in the next five years, and in the next 10 years we'll be competing directly with Vanguard and BlackRock. The way that happens is, you know, we are moving to a tokenized world where the majority

of real-world assets, real-world securities, real-world ETFs are held in tokens that live on Ethereum. We firmly believe that that will happen in a decentralized way. That is the only way to power really the financial revolution of the future that can manage this level of complexity. And how that happens on a tactical level, right? Like there's mass adoption that needs to happen. There's mass awareness of the space. But what happens with us internally is, you know, The one lesson we take from Tradfai that I think, and this is a real lesson, is how do you build an institution that will last for a decade? How do you build institutions that will last for 50 years or 100 years? And yes, right now, like these, what we are building, it happens on chain and these are all

very nascent organizations. But we are very, very focused on building a protocol that will last for the next decade, that will last for the next 50 years that is built on humans. It is built on leaders. It is built on core values. It is built on our framework of trust where millions and millions of families can one day entrust the financial future of their families to what we are building. And that is the reality we are moving to. And that framework and that foundation of values is what will enable us to compete directly with Vanguard, compete directly with BlackRock. And we are going to do it better than they have done it. We are going to do it in a better way, in a more equitable way, in a way that is more fair for families across the world. And the only way to do that is through

decentralized finance. There you go, guys. Index co-op. It's been a pleasure to have you on bankless. It's clear you guys are dead serious about a decentralized version of Black Rock. Five years to flip in the crypto banks. In 10, you'll be flipping the traditional Black Rocks of the world. It's been a pleasure to have you guys on bankless. Thanks so much. Thank you. Thank you. Appreciate it.

Bankless listeners. Thank you, guys. Awesome show. Yeah, thanks, Simon. Bankless listeners, as always, we've got some action items for you. Go check out the Index Co-op products. You can do that at Indexcoop.com. Of course, number two, you can also check out the Bed Index.

Super excited about that. Just launched, I think, Wednesday or Thursday of last week. I think it launched with over a million in assets under Manifold. It's like 1.5 or so by the time you are listening to that. So go check it out. Save your friends. Don't get them to invest in terrible assets they find on YouTube unless you're tuned to this YouTube channel.

Buy bed instead. Sleep comfy at night. Risk of disclaimers, guys, of course. Crypto is risky. So is Eid. So are the indexes that we talked about in this episode. You could lose what you put in. But we are headed west.

This is the frontier. It's not for everyone. for everyone, but we're glad you're with us on the bankless journey. Thanks a lot.