NDX Is Now A Productive Asset

I Don’t Care To Read All This, Just Link Me!

We strongly recommend reading this article first, but if it’s not your first time here, here you go!

NDX Staking

I’m New, What’s Going On?

Since the Indexed Finance DAO was created, there has been a desire expressed by its members to distribute the revenue generated by the underlying protocol to holders of its governance token.

So, NDX Isn’t A Pure Governance Token Anymore?

Technically, it still is. Indexed’s Governor Alpha will still be based on NDX votes, and any NDX that you lock in exchange for dNDX will have its voting shares automatically delegated back to the depositor.

Where Does Indexed’s Revenue Come From?

Indexed currently generates revenue in the form of exit fees within our index products: a small percentage (0.5%) is taken when an index token such as the DEFI5 is ‘burned’ into its constituent pieces, such as AAVE and UNI. The vast majority of this revenue comes from arbitrageurs that are keeping the NAV of our products and their value on the open market in check.

How Much Protocol Revenue Are Stakers Receiving?

Following a Snapshot vote, the Indexed DAO decided to split protocol revenue 40/60 in favor of dNDX holders: for every $100 generated in revenue, $40 is kept by the Treasury and $60 is distributed to dNDX holders.

Can I Sell My dNDX Tokens? What Happens If I Do?

dNDX tokens have a varying fair price which is determined by the ratio at which they were minted (so, the length of time associated with the lock that created them). The ‘base’ price for dNDX is ¼ of an NDX token, and any market that appears will likely reflect that pricing.

How Is Existing Protocol Revenue Disbursed?

Roughly two weeks* after the launch of dNDX (i.e. from today), the Indexed Core team will put forward two on-chain proposals to both adjust the fee recipient for the exit fees and all future Nirn revenue from the Treasury to a seller contract, and move all revenue accrued to date to said seller contract. This gap in between phases allows everyone who holds NDX at present to think about whether they wish to enter a lock and determine their ideal timeframe for doing so, rather than immediately distributing months of collected revenue to the first NDX stakers.

Can We Gauge What The APR Will Be On Staking?

Not really. There are a lot of factors that determine the APR of dNDX, none of which are directly controllable by the DAO. To name a few:

  • Token price of NDX at the time it is locked,
  • Total amount of NDX locked for dNDX,
  • The percentages of NDX that are locked for various periods of time,
  • TVL of the index pools (more funds within the pools leads to more exit fee revenue as a result of arbitrage),
  • TVL of the Nirn vaults (more funds vaulted leads to more performance fee revenue),
  • Average yield rate across Nirn vaults, and
  • Market turbulence (more overall volatility leads to more arbitrage, which leads to more exit fees)

What If I Want To Reclaim My Locked NDX Early?

You’re welcome to do so, but if you want to exit a lock prior to the time that you initially set elapses, your underlying NDX will be subject to a pretty punitive slashing.

What If Something Needs To Change?

In the event that this mechanism is discovered to be flawed in some unforeseen way, a proposal is made and implemented that improves the design, or circumstance demand it, the DAO is capable of terminating the dNDX program by rerouting revenue back towards the Treasury and removing the slashing mechanism on early redemptions by way of a Governor Alpha vote. This latter action is a one-way trip, and it cannot be reactivated afterwards.

What’s Next For Indexed?

Core will spend the next few months focusing on developing the various components that are needed to evolve Indexed. The specific pieces that we will be working on are:

  • A metaoracle that allows us to price and include a much wider range of assets in our indices (widening our scope from just assets on Uniswap V2 to Uniswap V2/3, Sushiswap, Balancer, Coinbase and Chainlink),
  • A custom Balancer V2 pool implementation (to allow us to integrate with the wider Balancer ecosystem and Smart Order Router), and
  • An asset manager for vaulting pool liquidity using Nirn.



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