DeFi Pulse Index November Rebalance Completed
The first trustless rebalance has been executed for the DeFi Pulse Index
We’re excited to announce that the Index Coop has executed its first trustless rebalance for the DeFi Pulse Index (DPI) which marks the successful completion of IIP-5. The completion of this rebalance in a trustless way moves the Index Coop one step closer to being a fully decentralized organization.
Motivation
The Index Coop is a decentralized organization that manages the best index products on Ethereum. The rebalancing of these indexes is one of the main functions that the coop will be performing for every index product that it manages so it is critical that the rebalance is completed in a trustless way.
To that end, Set Labs put forward Index Improvement Proposal 5 (IIP-5) a couple of weeks ago in order to lay out the plans for how the entire process would work and to gather community feedback.
The Rebalance Process
The rebalance was completed on November 3rd 2020 at 07:45:26 AM UTC and you can view the final transaction hash here. The contracts that were used in this rebalance have been audited by ABDK Consulting.
A new smart contract called the IndexCoopManager (ICM) was deployed which handed over control of the Index Coop (IC) manager smart contracts to the community. This new manager contract allows for delegation of permissions to methodologists by only allowing methodologists to call certain admin functions. Additionally, it allows for 2 of 2 Multisig style administrative updates between the IC community and the methodologist instead of relying on off-chain agreements enforced solely by the IC Multisig.
The methodologist of the DeFi Pulse Index (DeFi Pulse), Set Labs and the IC community completed the rebalance of the DPI in a trustless manner using these new tools.
The rebalance process:
- DeFi Pulse published the new weights for the DPI off-chain (found here)
- The Index Coop community verified that the weights were accurate
- The community updated the Index Module execution parameters that were used to create the rebalance trades
- The Index Coop multisig then converted the weights to smart contract compatible units
- The compatible units were then submitted to the SingleIndexModule contract which started the rebalance
- Lastly, the community executed the rebalance trades through the IndexModule
The DeFi Pulse Index Weights
For the November rebalance, the DeFi Pulse Index weights were realigned based on the table below. You can always view the full and up-to-date methodology for the DPI here.
Please note that the weights in this table were calculated on the 22nd of October 2020 so they are slightly different from what was actually executed during the rebalance. The exact amounts that were processed during the rebalance can be found here.
The next rebalance for the DPI will be executed at the beginning of December.
What’s Next
While we’re excited about this new trustless rebalance process, there are still additional ways to make it even more robust and decentralized. In the near future, the coop will work to transition the rebalance process fully on-chain by having an on-chain binding voting mechanism for INDEX holders and using oracles for all of the assets in the DPI to determine the weights of the index.
Another important piece is allowing anyone to participate in future rebalances as the November one was limited to just whitelisted addresses.
Smart Contracts
SingleIndexModule: https://etherscan.io/address/0x25100726b25a6ddb8f8e68988272e1883733966e#code
ICManager: https://etherscan.io/address/0x0dea6d942a2d8f594844f973366859616dd5ea50#code
