[Proposal] Treasury Swap: Indexed <> Balancer

Today, Indexed announced that it is the recipient of an ongoing grant from the Balancer Grants DAO in order to build out the infrastructure required for an eventual port to a custom Balancer V2 pool as the underlying implementation of our products.

Balancer as a product is one that we owe a great deal to - as Indexed is based upon a fork of Balancer V1 - and for that we’re grateful for the opportunity to more closely engage and align with a community with the insight and resources to improve our offerings, brand awareness and network effects further.

With the aim of deepening ties between the two protocols beyond Indexed simply receiving funds and liaising with the Balancer Grants DAO as we progress, this proposal is one of giving each party exposure to the other via a Treasury to Treasury token swap: a first for both protocols.

It is simultaneously being proposed to the Balancer DAO here.

Specification

5,000 BAL from the Balancer Ecosystem Fund would be exchanged for the equivalent USD value of NDX tokens from the Indexed Treasury using the 20 day smooth moving average price taken at the conclusion of a Snapshot vote approving the deal (which will be initiated following community feedback in this thread). Price feed will be BAL/USDT (Binance) and NDX/WETH (Sushi). At current prices of BAL, this amounts to a swap valued at approximately ~US$134,000.

The Indexed DAO will deposit BAL into the BAL/WETH 80/20 pool via single asset deposit. If/when Balancer launches the ability to lock BAL/WETH liquidity as proposed here, Indexed DAO will lock their liquidity for a period of at least 1 year. In the interim, the Indexed DAO is free to earn BAL rewards.

Conversely, Balancer DAO will deposit NDX into dNDX with a lockup period of at least 1 year, once the contracts for dNDX have been deployed. Read more about dNDX here .

Call To Action

Thoughts on this? We want to hear them, with mind to creating a Snapshot vote on this proposal in approximately two weeks, so you have plenty of time to have your opinion heard! There’s a poll below which acts as a temperature check [although it’s not gated to actual NDX holders], so please express yourselves there as well.

Should Indexed Finance and Balancer enter into a treasury token swap on the above terms?
  • Yes, as proposed
  • Yes, but with different terms
  • No, under no circumstances

0 voters

1 Like

Wouldn’t make sense to create a 80/20 NDX/WETH on Balancer also? What is the downside? Also dNDX doesn’t risk to fragment liquidity? I know its late for this convo but I see it as a better solution longterm

For which side are you proposing creating an NDX/WETH pool? Balancer or ourselves? Given the existence of the NDX/WETH pair on Sushi (incentivised by Onsen), it doesn’t - in my opinion - make sense to create another pool on another protocol and ask for rewards for it to make it equally attractive. That is splitting liquidity, but I’m happy to be shouted down here.

The NDX that would take part in this swap would come directly from the vested Treasury tokens (so nothing is removed from existing liquidity), and dNDX is simply a mechanism for locking up NDX in the medium-long term in exchange for a share in protocol revenue (similar to how us doing the same with BAL/WETH on Balancer would be rewarded through swap fees and liquidity mining).

There’s a tradeoff here between what both DAOs receive in exchange: Balancer receives additional liquidity in their primary pool, whereas we receive a partner DAO that has a non-trivial amount of NDX delegated back to them from the pool for voting, in order to decrease our voting centralisation.

Am I missing something here?

Hi @Norsefire,

thank you for your answer!

my question was not directly related to the token swap which I think is really good. Balancer needs treasury diversification while indexed gets a great partner.

I was instead wondering what’s the best option between:
having a single token to be staked (dNDX) while maintaining an incentivised 50/50 SUSHI pool (NDX bulls have a lower upside potential) ;

or

going the same way Balancer is going with their 80/20 BPT staking pool (to be launched soon) with BAL incentives (while still collecting protocol revenue to be distributed to stakers).
The second option would have a higher upside potential (80/20), would not remove NDX from the market and BPT holders would still get protocol revenues)

Again, I’m super late to this conversation but I just wanted to throw it out here. I hope you don’t mind.

:smiley:

1 Like

It’s worth saying that both of the above options are now live: dNDX and a generously incentivised 80/20 BPT on Arbitrum.

In fairness, we don’t incentivise the 50/50 NDX/WETH Sushi pool either: that’s done through the Onsen program [we’re super lucky to have such great collaborators in the space!].

As far as my reasoning goes as to why we’d want to run with dNDX regardless is the fact that it may be the DAOs desire to utilise it for operating Governor Alpha of sidechains, or other such vote-escrowed preference parameters like liquidity mining while it’s still running (although neither of these are currently active). With the way that dNDX is set up, @d1ll0n believes that it’s possible for us to allow dividends to accrue to dNDX holders even if the tokens are sitting in a bridge contract over to, e.g. Polygon.

More importantly, depositors of NDX in exchange for dNDX are still capable of voting with the underlying: a BPT doesn’t allow us to do that. Tokens within dNDX timelocks are placed in a distinct contract and delegated back to you: it’s important that members of the DAO can still express their voice on-chain if desired while still being able to stake a claim on revenue.

What with dNDX released, and unanimity thus far on the proposed terms in the OP, I’ve asked the folks over at Balancer for us to coordinate a time for us to run a Snapshot vote to settle the amounts that would be exchanged.

Please: if any member of the DAO wishes to support or oppose the above, or suggest alterations to what is presented, here’s the place to do it!