Index Coop Q3 Financial Report — Summary
April — June 2021 — All figures stated are correct as of 30th June 2021
Click here for the full Q3 Financial report
In the full report, we dive into the following topics:
- KPI’s and Key Financial Statements
- Key Cost Review
- Product Performance Review
- Competitor Analysis
- Forward-looking Initiatives
Summary
The Index Coop has grown significantly in the last quarter. We have seen a doubling of revenue generated YTD along with a sizable increase in Total Value Locked (TVL), total unit supply, and new wallet address exposure. This puts us in a great place to successfully meet our core KPI’s.
At a high level, revenue growth in Q3 was primarily driven by the release of our leveraged product series. ETH2x-FLI surpassed DPI’s contributions to become the main revenue source during the month of May, helping us to reach a key milestone of surpassing $1m in revenue on 19th June. It should be noted that recent market conditions have resulted in a reduction in fee generation for June. This downturn resulted in a 32% reduction in gross margin across all products. However, this was more than offset by a 50% curtailment in liquidity mining costs. Ultimately, we reduced the monthly deficit from a $1.2m loss in May to $500k in June.
Key Financial highlights
- TVL is up 18.3% from Q2 to $164.3m.
- Aggregate trade volume (7-day moving average) is up 25% from Q3 to $9m.
- Total unit supply across all products is up 220% from Q2 to 1,288,844.
- Total Q3 loss stands at $3m bringing the YTD loss to $5.56m. The main contributor to this loss is liquidity mining incentives, totaling $4.8m YTD.
- Contributor rewards are up 50.6% from Q2, totaling $600k for the quarter.
- The first strategic diversification of treasury funds was completed, raising a total of $7.75m USDT. The round was led by 1kx and Galaxy Digital.
Treasury balance
The Treasury balance has changed significantly over the last quarter. At the start of Q2, the majority of the balance was exclusively native INDEX tokens. The Treasury currently receives periodic income from a vested token contract paid in INDEX as part of the genesis contract this is discussed in more detail within the Q3 report.
As part of a strategic diversification of treasury balances, Index Coop has received $7.75m via strategic raises. The remainder is split $0.258m DPI, $0.18m ETH2x-FLI, $21k BTC2x-FLI, $8k MVI, and $31m INDEX tokens.
Index Coop is committed to boosting the on-chain liquidity of INDEX and is currently monitoring market conditions and trading volumes.
There has been significant movement in the Treasury balance since Genesis, peaking at $87m on 9th May. Since this date, the Treasury balance has declined as a result of market conditions towards the end of Q3.
The community is excited to be receiving the keys to the Treasury from Set Labs over the coming months. This will enable the community to implement forward-looking initiatives, such as the creation of the Operations and Investment accounts.
Forward Outlook
When taking a forward-looking view on the DAO, we can see that revenue is expected to surpass $2m YTD. The recent market conditions have curtailed the spike in revenue seen within May. However, continued unit supply and address exposure is expected to increase, thus generating revenue for the DAO.
Whilst the Index Coop is not yet profitable due to high initial liquidity mining incentives, growing revenue and lowering incentives for liquidity mining is as step in the right direction.
Overall the Index Coop and its community members remain committed to the continued success of the DAO. The performance in Q3 has highlighted how effective the entity is at generating interest and ultimately creating products that emulate well within the market. Q3 was largely successful as a result of the very bullish nature of the market throughout April and May, coupled with continued product development.
For further insight into the Index Coop please see the full Q3 financial report.
