Liquidity mining $INDEX, a review

Digging into the data from the initial INDEX token distribution

Note: this was first published 14th December 2020 on my old blogging platform, some figures and text has been updated.

Introduction

As $DPI was the only product at launch, liquidity mining of the Uniswap ETH:DPI pair was launched as the centre piece of the INDEXcoop genesis. 900,000 INDEX tokens were allocated to the staking contract to be distributed over 60 days.

This had a number of objectives:

1. Dispersing INDEX to a wide body of people in a neutral way

2. Increasing DPI holding

3. Marketing awareness of INDEXcoop and DPI

4. Recruiting new members to the coop

The programme finished on the 6th December, so we can now look at the numbers.

There is a second INDEX liquidity mining programme running from the 7th December to the 7th January 2021, but this has a much lower reward rate.

INDEX price

Since genesis, 10% of the INDEX tokens have been released to the open market. 1% via an airdrop and then 9% as part of the initial liquidity mining. After initial price discover, The INDEX price settled between $1 and $3 for a few weeks. In mid November the price spiked to around $15 (apparently due to youtube tips), and then slowly bled back to $4 to $6 with no real gains since the main liquidity mining was stopped.

Figure 1: Coingecko INDEX price since inception

DPI supply and Uniswap liquidity

During the liquidity mining, the vast majority of issued DPI tokens were in the uniswap pair earning INDEX. There was an initial spike in issuance when the campaign was started on the 7th October. Max issuance for DPI was in mid November with ~330,000 in circulation. This correlates with the INDEX price spike which increased the percentage returns available. Following this, the number of DPI tokens has dropped and now leveled off around 200,000.

Figure 2: DPI issuance, Increases in numbers correlate with start of liquidity mining (07 Oct) and INDEX price spike (mid Nov)

The Uniswap ETH:DPI pair shows a similar overall trend. However, this is modified by the low price of DPI in early November (~$60 vs $100 now). As with the number of DPI issued this peaked in mid November, dropped towards the 6th Dec pretty flat for the last week. In the last couple of weeks, both $DPI and $ETH have increased in value resulting in more liquidity.

Figure 3: Uniswap ETH:DPI pair

There was also Sushiswap ETH:DPI liquidity mining in November which reduced the Uniswap pools size for a while. This has restarted for the last couple of weeks, but has not reduced Uniswap liquidity.

INDEX claims

As everything is on-chain, we can review which addresses and who claimed the INDEX. Figure 4 shows the daily total and sum of INDEX claimed from the staking contract. The large peak of 87,000 tokens on the 7th November co-insides with INDEX price hitting $1.30. The second spike of 61,00 on the 17th co-insides with the price hitting $15.00.

Figure 4: Daily and running total INDEX claimed

Overall there were:

1. 5,125 individual claims (175 INDEX average)

2. 1,526 unique addresses (590 INDEX average)

However, the top 10 addresses captured 49% of the total tokens with an extremely long tail of smaller collections.

Figure 5: Number of INDEX claimed per address

The top 50 addresses accounted for 81% of the total INDEX claimed. In total 86 addresses claimed over 1,000 each, and 367 got over 100.

Figure 6: Percentage of INDEX claimed by different cohorts of addresses

Table 1: Average claim size and percentage of total claimed for different cohorts

Claim frequency

Looking at the addresses, and the daily claims for each, it is possible to do some profiling on them in terms of claim frequency(Table 2 and Figure 7):

Table 2: Number of claims for top 10 addresses

Figure 7: Size and schedule of clams by 10 largest wallets.

Note: The largest address 0Xdaa.., which claimed 68,000 index appears to be be linked to Alpha Labs who were farming INDEX as part of the leveraged farming programme. The Address at position 4 with 43,000 INDEX also made daily claims from the 16th October and is most likely a farming contract. Therefore, the distribution is likely to be wider than this superficial analysis suggests.

Final Thoughts

The liquidity mining has been successful in meeting a number of objectives:

• DPI AUV has grown significantly over the last 9 weeks and it has been integrated into a number of protocols and is being considered by others.

• There has been a large dispersion of index holders with more than 2,000 addresses currently containing INDEX.

• INDEXcoop has launched and captured a large mind share among the DeFi community with farmers, purchases, and active community members directly linked to the programme.

Disclosure and Disclaimer

I’m a long term investor in crypto currencies including DeFi. I am an active member of the INDEXcoop which manages the $DPI fund.

This is not financial advice, all investments are risky, crypto investments are more risky than most. Do your own research. Do not invest more than you can afford to lose.

@over-analyser on twitter