This was discussed in another discord, and then brought to the Indexed.Finance discord to see if implementing such a system would be possible. It was determined that while complex, it may be possible, which resulted advancing this discussion to this forum.
As it stands, there is enormous sell pressure on $NDX and it is being treated as another standard farmable asset. I understand that were are discussions on how to remedy this, but I would like to propose the following:
Generating passive income for $NDX holders/stakers
Currently, we have almost $10m TVL in various assets. These assets are a result of users depositing their defis and minting the index tokens (cc10 and defi5). This number is only going to grow as new users onboard to the platform. These assets, as it stands, are just sitting there. Many of these tokens have inherent value and functionality outside just their price tag. The majority of them can be used on Aave, Compound, Harvest, Curve, etc. to either earn interest, farm, or earn yield.
This is the topic I want to bring to a formal discussion. Would it be possible, to unlock these assets, and have a smart contract use them on various platform to earn yield, farm, etc., and then have that contract sell the rewards into DAI, ETH, or something else and disburse all fees earned, yield farmed, etc., to those either holding or staking $NDX
This would generate passive income for those holding or staking $NDX and would alleviate sell pressure massively. It would also incentivize more TVL. Users would deposit their defis to farm $NDX (until farming ends) in order to tap into this passive income, which would increase the farming power of the smart contract.
This would also address the potential exodus when farming ends by incentivizing the holding/staking of $NDX.
Obviously this is a pretty radical change of direction, but something like this could take this project from a small/mid cap to something much larger. Exposure to the current indices as well as future ones is very attractive to those with a low-risk appetite, but the ability to earn passive income while maintaining that exposure becomes VERY attractive. This also encourages participants to buy $NDX to tap into this revenue stream instead of just buying and hoping “number go up”.
Should this approach prove too risky (potential of these platforms to suffer a drain, exploit, etc., and jeopardizing deposited funds, some of the underlying assets still have utility that maybe can be explored. SNX can be staked to earn weekly rewards, for example.
TVL is growing and will probably continue to grow. There is untapped potential to use these funds to feed the ecosystem and help grow what has already been built here. I wanted to bring this to a discussion to see if this is something we are interested in exploring (assuming it’s even possible)
Governance is important and a great starting point, but creating long term value accrual on the NDX token itself has a net positive effect where a stronger community of long term holders will exist.
Any feedback is appreciated.