State of the Index Report — DEFI5

DEFI5 Synopsis:

DEFI5, by Indexed Finance (Indexed.Finance) is a laser-focused index of the most successful large-cap decentralized finance protocols across the Ethereum ecosystem. From the most popular lending and borrowing protocols to the largest decentralized exchanges, DEFI5 covers the protocols that power DeFi.

Current Constituents:

UNI — 39% — $4,970,804 — The #1 decentralized exchange by total volume.

AAVE — 18% — $2,298,648 — Lending and borrowing protocol.

COMP — 15% — $1,942,363 — Lending and borrowing protocol.

CRV — 13% — $1,729,510 — Decentralized exchange with a focus on stable pairs.

MKR — 13% — $1,699,621 — Lending protocol that lets you lock collateral in exchange for DAI.

SNX — 2% — $211,484 — Protocol for issuing synthetic assets. — *Phasing Out*

Performance:

Token Price: $86.77 -10% (1mo)

Current TVL: $12.9M

Trading Volume: $171K (7d avg)

Burn Fees Collected: 341.93 DEFI5 — $29,708

Latest News:

UNI:

• Dune Analytics detailed a new community analytics program on the Uniswap governance forum on Sept 7th. The proposition is actively being discussed and welcomes feedback. Source
• The “Support $oneUNI Stablecoin” temperature check mentioned in last week’s CC10 report has concluded. The vote passed with 210k UNI or 99.87% of votes in favor of an 800k+ (1M $UNI loan) option. One single address accounted for 207k of the UNI votes. Source
• Uniswap is now available on the newly released Arbitrum network. This is an alpha launch of Uniswap v3 and is subject to change, but currently, 33 tokens are supported at launch. Source
• With the ever-evolving regulatory landscape, Uniswap has opted to delist certain tokens from their interface to better fit the current regulation. The delisted tokens will remain available through the autonomous Uniswap protocol allowing third-party interfaces to still list them. Source
• Uniswap V3 is also available on the Optimism network and currently has $15 million in total value locked with an all-time high of $104 million TVL. Source
• UNI 180d Performance:

AAVE:

• A proposal to launch the Aave platform on the Harmony blockchain is currently active and runs until Sept 17th. The proposal seeks to bring the Aave v2 frontend and provide $5M of ONE tokens to incentivize adoption. Source
• The AIP-26 “Raise Maximum Interest Rate on AMPL Market” proposal mentioned in last week’s CC10 report has concluded. The vote passed with a total of 374k AAVE in favor of implementation. Source
• Aave shares how it plans to implement cross-chain governance now that the protocol is expanding to L2 and alternative networks such as Polygon, Arbitrum, and soon Avalanche. The article details how cross-chain proposals and code execution can be sent across bridges to implement updates to the Aave protocol in a multi-chain environment. Along with this governance update, Aave announced the open-sourcing of their frontend interface codebase. Users/projects are now able to create their own interfaces for the Aave protocol using the official code repositories. Source
• AAVE 180d Performance:

COMP:

• A proposal “Distribute DAI to Users Affected in the DAI Liquidations” is currently active and open to voting. The proposal seeks to compensate users that had their positions liquidated on Nov 26th 2020, when the price of DAI briefly traded at $1.30 on Coinbase Pro. If the proposal passes, affected users will be reimbursed the 8% liquidation penalty that they incurred during the event. Source
• A proposal “Address Whitelist for Submitting Proposals” is currently active and open to voting. The proposal will implement a community-managed whitelist of users that may submit on-chain proposals without meeting the 65k COMP requirement. The purpose of this change is to allow special users to put forward proposals in a more streamlined manner. Source
• Compound announces Compound Treasury, a new program to help traditional businesses and financial institutions to leverage Compounds high-yield interest rates. Compound is working with Fireblocks and Circle to offer a safe and simple-to-use product that removes the complexities of private key management and crypto-to-fiat conversion. Compound believes that the program will help bridge the benefits of DeFi to traditional finance and help onboard the next billion users. Source
• The Compound Grants Program has funded another round of developments. Seven projects working on various Compound protocol improvements have received a total of $77K in grants. Source
• COMP 180d Performance:

CRV:

• A proposal “sCIP#42 Resubmission — Add a FEI-3pool Metapool” is currently active and open for voting. The proposal seeks to add and incentivize a FEI-3pool. Source
• A proposal “Ramp A for the OUSD factory pool to 100. Ramping occurs over 1 week.” is currently active and open for voting. Source
• The update to the “tricrypto2” liquidity pool has been implemented and now see’s liquidity follow price much more accurately. Source
• Curve Finance releases the August/September round of ecosystem grants. A total of 47,500 CRV, currently equal to $115,900 in USD will be distributed to various projects to develop the Curve ecosystem. Most of the grants will be used to increase support infrastructure, but it appears, merchandise and educational content will also see support through the grants. Source
• The Fantom Foundation pledges to provide liquidity mining rewards to the Curve Finance pools on the Fantom network. Currently there are three pools available on the Fantom network (fUSDT, 2pool, and renBTC) eligible for these rewards. The Fantom Foundation will provide 1 million FTM tokens per month for 12 months or a total of $14.8 billion in rewards using today’s FTM price of $1.24. Source
• Curve Finance will be launching on the Avalanche network as part of the “Avalanche Rush” DeFi incentive program. The Avalanche team has allocated $7 million worth of AVAX in liquidity mining incentives for Curve users. Source
• CRV 180d Performance:

MKR:

• A proposal to establish fixed-rate vaults into the protocol has been published to the community. The proposal seeks to use the Deco fixed-rate protocol to create vaults that provide a fixed rate and pure yield instruments to hedge against volatility. Source
• MakerDAO revamps its governance model following the success of the protocol. The Maker Foundation was tasked with bootstrapping protocol responsibilities to the community-run DAO and has done so extremely successfully. Following this success, the Maker Foundation will be dissolved over the course of a few months meaning the Maker protocol will be fully decentralized. Source
• An executive proposal was executed on Aug 24th that detailed budget allocations to the MakerDAO Core Units with a total of ~$2.9 million DAI being distributed. This proposal also implemented the MOMC parameter changes, Increases to the “UNIV2DAIUSDC-A” max debt ceiling, and some general protocol housekeeping.
• There is an active executive proposal that MKR holders can vote on. The proposal implements changes to the “Flash Mint Fee” by decreasing the fee from 0.05% to 0%. The “PSM-PAX-A” debt ceiling will be increased from $50 million DAI to $500 million DAI. Included in the proposal is MIP-54 which will introduce the “DssVest” module that automates token vesting. Other changes include the distribution of DAI to various operational wallets.
• MKR 180d Performance:

SNX:

• A proposal to use Footprint.Network’s data analytics to build out an actionable data dashboard is currently being discussed with the community. Source
• A proposal “SIP-179: Kwenta Independence” snapshot vote has passed establishing Kwenta as its own protocol separate from Synthetix. Source
• Synthetix exchanges have launched on the Optimism L2 network. The exchange platform Kwenta will be hosting these synths as part of the initial testing phase. Source
• In Synthetix’s latest monthly update, the team details the launch of synths on Optimism L2, changes to governance, and a new SNX yearn vault. Synths are currently available on Optimism L2 through the Kwenta exchange. SIP-157 outlined the responsibilities for Synthetix’s ambassadors which should further incentivize participation in the role. In the tweet made by Yearn Finance, a new passively debt-managed SNX vault has been created that will ease gas costs for claiming and compound accrued SUSD into yearn vaults. Source
• SNX 180d Performance:

*Data current as of 9/12/2021.

About Indexed Finance:

Indexed Finance (Indexed.Finance) is a project focused on the development of passive portfolio management strategies for the Ethereum network.

Indexed Finance is managed by the holders of its governance token NDX, which is used to vote on proposals for protocol updates and high-level index management such as the definition of market sectors and the creation of new management strategies.