Proposal for Liquidity Generation

As we know, liquidity on the NDX token is still fairly low.

I propose a solution for this, the creation of an index that contains NDX-ETH LP as one of the assets or the addition of NDX-ETH LP to an existing pool. This would incentivize ownership of the NDX token and incentivize LPing in one move.

User flow: Buy NDX > (Buy ETH if they don’t have it) > add liquidity > mint index token with NDX-ETH > stake index token.

Additionally, minting of the index token with the other assets than NDX-ETH would create buying pressure on NDX-ETH.

User flow: Mint index token with other asset(s) > index internally balances by purchasing NDX and LPing > user stakes index token.

Seems like everyone wins. More liquidity, positive feedback buying of NDX, index token holders get NDX exposure and benefit from the feedback’s effect on NDX price.

I think we need not focus on strategy to drive up NDX buying pressure or its price, which I believe is also a concern shared by many of the members in the discord community. This feels inorganic.

NDX token is meant for governance of the protocol. If you would like to have a say in the project’s future direction, you can buy it or farm it; but if you are only interested in yield (number go up), then buy one of the index tokens listed in the protocol (e.g. DEFI5).


This has been discussed (and even proposed on the forum) multiple times. I believe the consensus is that there’s no reason to incentivize NDX liquidity at this moment, as it basically just provides those who want to dump with exit liquidity and doesn’t really provide any value to the rest of the protocol. It also has the negative effect of disincentivizing governance as the gov. tokens will be locked in a staking contract. The main purpose of NDX is to be used for governance, and anything that discourages that is essentially working against us.


I agree with this for now. But in the future it may make sense to incentivize liquidity as it will help bring in larger players to governance when there is less rewards to distribute.


It’s not just about price. It’s about people being able to buy the NDX tokens without large slippage so people can participate in the governance. Also many people don’t want to hold illiquid tokens for fear that someone will dump on them or that they can’t sell without a lot of slippage if they need to. I know it crosses my mind that I could wake up to a single person market selling a quarter of my value away…

I think if there was better liquidity we’d see more buyers, more holders, more distributed governance.

Additionally, it wouldn’t be that complicated to let the holders of the index or indices that contain NDX-ETH also participate in governance, proportional to the equivalent NDX they’re holding in the index.