Proposal to Whitelist DEFI5

OLD GOV (LEGACY)
1

This proposal is due to appear on Snapshot on Monday 5th April, 1pm UTC. Make sure to stake your vBNT for voting before this date and time to participate in the DAO decision.

This proposal is part of the general proposal to whitelist Indexed Finance indices. The parent document can be found here.

DEFI5 is the flagship product of Indexed Finance with the highest TVL and the best performance across all indices in the DeFi space. Since its launch on December 22nd 2020 DEFI5’s price has increased by over 430%.

It consists of the Top 5 DeFi projects by market cap namely:

  • UNI ($17b), 24h trading volume:$770,422,890

  • AAVE ($4.5b), 24h trading volume: $320,593,781

  • COMP ($1.7b), 24h trading volume: $90,759,381

  • SNX ($2.9b), 24h trading volume: $119,708,097

  • CRV ($656m), 24 trading volume: $143,302,744

How does DEFI5 work?

DEFI5 assets sit in a liquidity pool and re-balance automatically based on the market caps of the underlying tokens. A controller contract fetches the market capitalization of each token from a Uniswap price oracle and submits new target weights to the index pool based on a capitalization-rooted weighting algorithm.

DEFI5 tokens are actually LP tokens that represent a share in the AMM pool. They can be redeemed at all times against the underlying tokens in the pool or sold on a decentralized exchange provided there is sufficient liquidity.

DEFI5 contract address: 0x86772b1409b61c639eaac9ba0acfbb6e238e5f83
DEFI5_overview

Security

The Index Pool contract is a fork of the Balancer Pool. The primary changes made to the contract were to enable more dynamic pool management so that assets can be bound, rebound and reweighed gradually and without the need to access external liquidity.

These changes have been audited by two independent security experts: Daniel Luca, a former auditor for Consensys diligence, and Mudit Gupta, the lead blockchain engineer at Polymath.

Daniel Luca Audit
Mudit Gupta

Although DEFI5 doesn’t have a large market cap itself, it represents a basket of the largest and arguably most secure tokens in the entire DEFI space.

Approximately two-thirds of the token supply is spread across the liquidity pool, the rewards contract, and the MATIC network bridge; the largest token holder owns 4.4% of the token supply.

Volume & Fees

  • DEFI5 market cap: $15m
  • TVL in the DEFI5 pool: $12m
  • 24h volume: $284K
  • 24h fees: $854
    DEFI5_TVL
2 Likes
2

I’m in support of this proposal. Thank you for putting it together

2 Likes
3

I support the proposal

4

Hello!

There’s way better, more capitalized, more volume, more transparent defi index available. why are we not going with this instead?

5

You are welcome to propose it, DPI is also a very good index but that doesn’t mean there isn’t room for both projects. as far as whitelisting goes economics matter less its more about protocol safety since it’s an application for insurance in a sense. Also I do think the indexed team has been and and continues to be quite transparent in their operations as well as care very much about the decentralization and self-governance ethos which are both pretty in line with bancor’s own beliefs.

EDIT : actually i do think there’s been a request for a co-investment but it’s a really minute one at that, and i don’t see any reason why the indexed team wouldn’t offer LM rewards on their side as they’ve done with other dexes so overall it could be very lucrative. a big difference here is the indexed team has reached out to us rather than the other way around so there is a lot of room for co-operation.

2 Likes