Status: Proposed Author(s): @Metfanmike and from @Finance.Nest, @Matthew_Graham, @Hammad1412, @prairiefi and @ElliottWatts Reviewed by: @GovernanceNest
Created: 18th February 2022 Discussions to: https://gov.indexcoop.com/t/proposed-iip-134-index-coop-retrospective-airdrop/3888 Quorum: 109,069 INDEX - 5% of circ. supply (2,181,385 INDEX)

Summary

This is a follow up proposal from IIP-118 which set the foundations for the directional commitment to an $INDEX airdrop with the intention to help build a sustainable community ownership. This IIP proposal formalizes the retrospective airdrop with the distribution of 1.5% (150,000 $INDEX) of total INDEX supply to contributors based upon USD value earnings.

Abstract

The Index Coop is proposing an airdrop to contributors based upon impact of contributions made to the DAO after the initial Genesis distribution up until the end of 31st January 2022. INDEX tokens are to be distributed on parcel as per the Technical Specification detailed below.

Further details around the airdrop and how it fits into a large remuneration construct at Index Coop can be found here. Do note, some minor details may have evolved over time to reflect the current proposed implementation timing.

Motivation

In an attempt to improve contributor ownership at Index Coop, this proposal presents an opportunity to administer a retrospective airdrop. The community has already directionally committed to an airdrop within IIP-118. This IIP intends to outline the Technical Specification of the airdrop along with distribution timelines. The intention of the airdrop is NOT to provide contributors with a pay day but to increase protocol ownership to allow the people who have built this DAO to have more influence over how it operates. As part of reviewing the effectiveness of the airdrop, Finance Nest will be tracking the retention rate. Community retention data will feature in future INDEX emissions to contributors discussions. The airdrop will hopefully enable contributors to kick start their reward earnings through the DSM.

Specification

This section details the key parameters incorporated into calculating the INDEX emission schedule:

• 1.5% of Total Supply will be distributed
• “Airdrop Transfers” six equal amounts, transferred once per month over a six month period, commencing February 2022
• “Contribution Value” USD value of a community member’s contribution to Index Coop
• “Current Contributor” contributors who have received contributor rewards, incl. Impression mining, in at least two of the following months December, January and February.
• “Early Community Rewards” emissions are not eligible for the Airdrop. (initial genesis allocation)
• “Emissions Timing” at the end of the month with the normal contributor payouts
• “DSM Accrual” all Airdrop emissions are to be included from Day 1 of the DSM program
• “Distribution Method” via Parcel
• “Full Time” are priced in USD terms as per the hiring proposal and incorporates only salary, excluding equity
• “Fixed Stipends” are priced in USD terms as per the WG/Nest proposal
• “Impression Mining” beneficiaries are included

The above inputs are considered the most fair and reasonable holistic assessment of contributors’ past impact to grow the community. The terminology mentioned above may differ from prior communications with an attempt to remove any ambiguity through providing additional clarity.

We will be sharing a calculator for individuals to use to calculate their airdrop amount, this will be shared after the contributor rewards submission for this month hopefully on 24th February.

Technical Specification

The airdrop is calculated using the contributor rewards sheets dating back to October 2020 to 31st January 2022. These contributor rewards spreadsheets are readily available on the governance forum. An example is linked here.

For contributors who opted for a Fixed Stipend, the Contribution Value used for those months is the dollar value at the time of the quarterly proposal. For Fixed Stipend contributors in July-September, when the prices at the time of payment were higher than at the time of proposal, this means contributions are valued at $20.25/INDEX vs the value on the date paid. For October-December, when stipends were based on $35/INDEX the inverse occurs as prices were lower at time of payment. This removes the INDEX price movement impact and reflects the USD value of contributor impact independent of token price movements.

To weight the airdrop towards current contributors, a 2.0x multiplier is applied to the USD value of all Current Contributors. In other words, a Current Contributor who earned $10,000 to date will be weighted as if they have contributed $20,000, resulting in a higher reward than an inactive contributor who also earned $10,000.

The weighted contributions are summed and each contributor’s weighted contribution value is calculated as a percent of the total contributions. That quotient is multiplied by 150,000 INDEX (1.5% airdrop) to solve for the total airdrop amount to receive. Below is a simple example to demonstrate the airdrop calculation:

Contributor Y’s earnings since Genesis to 31st January 2022 = $10,000

Applying 2.0x multiplier to the earnings: $10,000 x 2.0 = $20,000

Total contributions across Index Coop since Genesis to 31st January 2022 = $100,000

Contributor Y’s earnings as a % of total contributions = $20,000 / $100,000 = 20.00%

Total airdrop amount for Contributor Y = 150,000 (1.5% of total INDEX supply) x 20.00% = 30,000.00 INDEX

** Do note, all INDEX emissions distributed via the Airdrop are to be included within the DSM from Day 1. Beneficiaries of the airdrop will receive DSM emissions as if the total amount of INDEX distributed through the airdrop was already in their wallet.

Budget request

This IIP requests the budget necessary to honor the emission schedule detailed above. Over a 6 month period the total $INDEX emissions will be 150,000 (1.5% of total token supply) this equates to ~ $1m at today’s prices (18th Feb). And represents ~ 7.5% of our current liquid Index tokens.

Voting

FOR:

DO allocate 1.5% of Total Supply to the Airdrop and distribute to Contributors as defined above.

AGAINST:

DO NOT allocate 1.5% of Total Supply to the Airdrop and distribute to Contributors as defined above.

Copyright

Copyright and related rights waived via CC0.