User-created Indexes

Summary:
Ability for individual users to create their own indexes based off the assets they wish to see in them.

Information:
New index sites are popping up daily, and Indexed Finance needs something that sets them apart besides the growth rate of the current indexes, Defi5 and CC10. If individual users could create indexes for themselves, it would allow anyone to invest in any index made up of any tokens. For example, if a specific user wanted to invest in Wrapped Ethereum, Chainlink, and Uniswap, they could create an index consisting of those three tokens. That way, they could get the exposure of those tokens that they want without having to individually buy each one, or invest in a current index like cc10 and have exposure to other tokens as well. They could set custom weighting for each token in the index as well to get the proportions they want to see.

Index Requirements:

  • Must consist of at minimum 3 tokens, maximum of 20.
  • Balanced Weighting, maximum 50% weight given to one token, minimum of 5%.
  • Tokens present in the indexes must at minimum have 1 million market cap.

Requirements to Create an Index:

  • Must hold at minimum 10 $ndx. Drives value and and a use case to the token as without holding it not possible for someone to make the index they wish.

Thoughts appreciated.

4 Likes

I would really love for the ability for users to create their own indices, having to hold a certain of NDX is definitely a solid incentive - to ensure people are actually holding the required NDX there would most likely need to be a staking mechanism. Usually the most profitable companies are ones that are platform based where user created content is the main component.

2 Likes

I think this is a great idea and could be a differentiator for potential investors, but also valuable to the community to see what creative indexes others come up with.

I think having some guardrails for indexed as you outlined will be important and would think some more thought or additional items should be added to the requirements. One that comes to mind is that tokens present in indexes should have existed for a minimum amount of time. Maybe a month?

I also really like the requirement to own NDX in order to create an index. The one thing I worry about is as Indexed grows, this could end up messy when we think about displaying all of the user-created indexes and having folks buy into them. One idea would be to increase the NDX minimum a little more to people that are truly committed to the project and have to have more skin in the game.

I also think a secondary vote could be cool for displayed or “featured” indices showing a top 10 or 20 list that was curated by NDX holders. After a user creates an index, there could be a periodic vote from NDX holders to feature a set of them on the app. I think these would be other ways to also drive the value of NDX outside of the conversations of an exit fee.

This could help to still have the flexibility of lists and a huge number of created indices, but also have a streamlined view of some as well.

3 Likes

I like the added layer of voting on featured indices. I just know that we probably need a lot more guardrails and volume before we can probably realistically be able to a bunch of individual or more personalized dexes and that itself might even need it’s own committee to really look at the numbers and find what can actually be done. But this is the way to keep the community engaged and differentiate Indexed from other protocols.

3 Likes

yeah, there was some additional conversation in discord about this earlier today. I really liked the idea and a few other brought up other priorities or potential concerns with the plan. I think it could be used longer term as as way to help with community engagement and streamline the initial governance process. After hearing the concerns, I do think we would need to be thoughtful about the process and the guardrails for this to even be a possibility.

Perhaps raise the threshold of 10 $NDX to maybe a 100 or a thousand, I feel like we’re just gonna get flooded with one time index creators hyped up after watching “Billions” and railing Addies. I don’t want to see a list of 4000 different user created indexes. With a min of only 10, I would create 60 funds just copying DPI,PieDAO, or Synthetix new DEFI Index.

If you look at DEXTF(100 different indexes), it seems cluttered, messy and overwhelming rather than just simple and easy.

3 Likes

@beyob Agree that the clutter, overlap, and volume would be issues with a low requirement. We talked about this in the discord a decent bit.

My opinion changed a little bit. Rather than having an open ended platform for user-created options, I think this could be a cool enhancement longer term that still has community engagement but acts as a creative and potentially streamlined governance process. Maybe individuals with X amount of NDX could create a Index with a proposal through this process and NDX holders could vote to have it added to a core list or featured set or to get rid of it.

2 Likes

I think you guys are missing the point of the proposal. These indexes would not be displayed anywhere, only the user who created them would see them.

1 Like

I’m not trying to be funny but then how is that different from individuals just creating a separate metamask account to create private personalized savings? What would be the benefit of it being an NDX ETF if it’s completely privatized. It would be the same gas fees if you did it all by yourself, spreading costs and risks for better group efficiency is what index funds are used for.

3 Likes

I agree with this sentiment, why would I want a private for my eyes only fund on INDEXED if I could even just move some coins on my blockfolio to measure performance against my other coins, shoot I wouldnt even really need another metamask. I dont see the appeal for an index that only I would see.

I don’t personally think it is worth any developer effort or time to do enable completely personal indices which can’t be seen by anyone else. The gas prices are no longer shared, plus the contracts that have to be deployed. What benefit would I receive from using it? And what benefit does NDX actually see from doing this? Unless it takes some fee percentage for management, it doesn’t seem to bring anything to the table. And a fee makes it even less exciting as a user.

1 Like

Why not have a secondary market for the spots just like Polkadot has for parachains. Say 2 indices per month. Then anyone can propose an index, holders can vote and the best are released. Creates a good utility for the token

I think it could be a good idea !
Some randomly remarks to feed the discution :

  • If I need NDX for create my Index (for example 25 NDX/crypto included in the Index) and I have to stake/hold to keep/sold my Index token : it’s good for NDX

  • If I beneficiate of low cost fees thank’s to Indexed Finance mechanism and it’s cheaper to buy the Index token than the 5 included tokens directly in my wallet : it’s good for the user who create the Index

  • I have to or I can put this Index public, and there is incentive mechanism to do this : if there is a strong demand for my created Index, I’m rewarded (with part of the fees, with NDX…etc).

  • And we could display a classification of the created Index according to TVL, Index performance, trading volume…etc to earn some prizes or just for the glory ! ^^

  • And we could limit the number of created Index, for example 10 new Index/month, and we could put up for auction (paid in NDX) the 10 ‘slot’ for create Index ?
    (The NDX could be locked up as long as the Index exist, but I can use these NDX to vote…?)

1 Like

This is an improved version of my original idea…thank you for this! To anyone who disagreed with the idea, please read this!