<p><strong>Title: Engineering Working Group Request for Funding</strong></p>
<p><strong>Authors: <a href="/u/edwardk">@edwardk</a>, <a href="/u/dylan">@dylan</a></strong></p>
<h3>
<a name="situation-1" href="#situation-1"></a>Situation</h3>
<p>We are proposing funding for the Engineering Working Group for 3 months ending on December 31st.</p>
<p><strong>What is the core problem(s) you want to solve?</strong></p>
<p>As described in <a href="https://gov.indexcoop.com/t/deciding-how-to-prioritize-engineering-work-poll/2685">Deciding How to Prioritize Engineering Work</a> the in-house engineering team at Index Coop is relatively new. With the launch of DATA in Q3 we’ve proven that we can do most (but not all) of the work to launch a Simple Index product without relying on Set’s engineers. That’s a huge accomplishment! </p>
<p>However, there are many more products that we would like to launch which are much more technically complex. In order to build these effectively, we need better alignment between Set Labs and Index Coop’s Product and Engineering teams. At the same time, we have to get creative and intentional about increasing our in-house engineering ability.</p>
<p>The core problems we want to solve today are:</p>
<ol>
<li>Lack of visibility into product priorities, making it difficult to plan engineering work.</li>
<li>Poor coordination between Set Labs and Index Coop when it comes to R&amp;D efforts. This is in part due to Problem <span>#1</span>.</li>
<li>There aren’t enough experienced smart contract developers to go around and hiring them has proven difficult.</li>
<li>Lack of documentation, processes, and training infrastructure make it difficult to onboard even skilled developers.</li>
</ol>
<p><strong>Why is this worth addressing today?</strong></p>
<p>The range and quantity of new products we can launch are constrained as much by coordination problems as by limited engineering talent.</p>
<p><strong>How will you address it?</strong></p>
<ul>
<li>Seeking guidance from PWG for larger R&amp;D efforts, in accordance with expected future launches.</li>
<li>Improving coordination between Set Labs and Index Coop’s engineering teams.</li>
<li>Leveling up existing contributors’ expertise in smart contract programming by investing in mentorship, developer education, pair programming and other means.</li>
<li>Recruiting and onboarding additional engineering talent through our Wizardry channel.</li>
<li>Starting to build Index Coop’s brand in the developer community.</li>
</ul>
<p><strong>What impact will this project have?</strong></p>
<ul>
<li>Greater in-house financial product smart contract capabilities.</li>
<li>Integrations with at least 4 new protocols (CREAM, Curve, etc.)</li>
<li>Better tools for the community around calculating liquidity requirements and making multisig transactions.</li>
<li>Increased contributor participation in terms of commits to our Github project repositories.</li>
<li>2 additional full-time hires or the equivalent in contributors.</li>
</ul>
<p><strong>Working Group Leader(s)</strong><br />
Co-lead: Edward (<a href="/u/edwardk">@edwardk</a>)<br />
Co-lead:  Dylan (<a href="/u/dylan">@dylan</a>)</p>
<h3>
<a name="request-for-funding-2" href="#request-for-funding-2"></a>Request for Funding</h3>
<p><strong>Proposed Budget:</strong></p>
<p>$180,000 USD in INDEX ($60,000 per month) and 1,275 INDEX.</p>
<p>This compares to the Q3 budget of $120,000 USD in INDEX which did not include a gas budget.</p>
<p><strong>Use of Funds:</strong></p>
<p>425 INDEX per month for <a href="/u/edwardk">@edwardk</a> as working group co-lead.</p>
<p><a href="/u/dylan">@dylan</a> is a full-time employee of Set Labs and is not included in this budget.</p>
<p>$19,500 in INDEX per month is for full-time contributors <a href="/u/0xmodene">@0xModene</a> and <a href="/u/ncitron">@ncitron</a>. Their compensation packages were passed via <a href="https://gov.indexcoop.com/t/iip-66-smart-contract-engineer-offer/2279">IIP-66 <span>5</span></a> and <a href="https://gov.indexcoop.com/t/iip-75-web3-engineer-full-time-offer/2463">IIP-75 <span>4</span></a>.</p>
<p>We also request $45,000 in gas costs for the quarter to deploy new contracts and make transactions. It cost approximately $17,000 in gas to launch DATA, for example. We also need some budget for deploying other contracts (e.g. for OTC 3rd Close), technical operations (contributor rewards, methodologist reward payouts), and testing Web3 functionality on <a href="http://indexcoop.com">indexcoop.com</a>. Gas costs are difficult to predict and will depend in part on how many products are launched. It’s quite possible that we are underestimating future gas costs and may need to request additional funding.</p>
<p>The remaining $25,500 in INDEX per month will mainly be used to grow our contributor base. Recent highly talented contributors include <a href="/u/flattestwhite">@Flattestwhite</a>, <a href="/u/rootulp">@rootulp</a>, and <a href="/u/blockdev">@blockdev</a>, among others. We believe that with proper onboarding and incentives in place, contributors will increase their tenure and time allocated to Index Coop, and some will choose to join as full-time contributors.</p>
<p>Other uses of funds may include one-off bounties, recruiting costs, software/services, and smart contract audits (when deemed necessary).</p>
<p></p><div><a href="https://global.discourse-cdn.com/standard10/uploads/theindexdao/original/2X/c/c10b553354b7be162cd7657f9adbbe5df2d3a86f.png"><div>
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</div></a></div><p></p>
<h3>
<a name="organization-how-will-it-work-3" href="#organization-how-will-it-work-3"></a>Organization - How will it work?</h3>
<p><strong>What will you be doing?</strong></p>
<ul>
<li>Product R&amp;D performed in conjunction with Set Labs</li>
<li>Keeping backlog and sprint boards up to date</li>
<li>Weekly sprint planning meetings</li>
<li>Testing &amp; deploying code</li>
<li>Assisting Set Labs with rebalancing</li>
<li>Recruiting</li>
<li>Developer community outreach and participation (e.g. conferences, hackathons)</li>
<li>Regular knowledge sharing and collaborative code reviews</li>
</ul>
<p>Generally speaking Edward will lead on engineering culture, strategy, and planning. Dylan will be in charge of operations and coordinating execution of deployments and transactions.</p>
<p><strong>How will you interface with the community?</strong></p>
<ul>
<li>Forum posts and discord.</li>
<li>Product launch retrospectives.</li>
<li>Cross functional groups where required.</li>
<li>
<span>#Wizardry</span> channel for onboarding technical contributors.</li>
<li>Community updates via Monday morning meetings + an end of quarter retrospective.</li>
</ul>
<h3>
<a name="commitments-4" href="#commitments-4"></a>Commitments</h3>
<p>I am committed to <a href="https://docs.indexcoop.com/our-guiding-principles">Index Coop principles</a></p>
<p>I am committed to serving the entire Index Coop with my work.</p>
<p>I am committed to open, rapid communication: I know that clear, constant, public communication lifts up the entire Index Coop community. I am committed to this style of communication.</p>
<p>Shared learnings: I will share my progress, learnings with the entire community. I will ensure that anything I create is accessible beyond my own tenure for future generations of Indexers to access &amp; build on.</p>
<p>Intellectual honesty: I am committed to growth and improvement. I am open to feedback and will use feedback to improve my work for the benefit of the entire Coop community.</p>
<p>I am committed to making Index Coop a welcoming, fun, and engaging community to work in!</p>
<div><div><div>Poll to vote to approve and fund the EWG as described in this post</div><ul><li><div><p><span>100%</span><span>FOR</span></p></div><div><div></div></div></li><li><div><p><span>0%</span><span>AGAINST</span></p></div><div><div></div></div></li></ul></div><div><div><div><span>22</span><span>voters</span></div></div><ul><li>
                    
                    <span>Closed <strong>Oct '21</strong></span>
                   </li><li>
                
                <span>Results will be shown on <strong>vote</strong>.</span>
               </li></ul></div><div></div></div>

**POLL ADDED** Proposal: Engineering Working Group Request for Funding  Title: Engineering Working Group Request for

**POLL ADDED** Proposal: Engineering Working Group Request for Funding

<p><strong>Status:</strong> PROPOSED<br />
<strong>Author(s):</strong> <a href="/u/edwardk">@edwardk</a> , <a href="/u/cavalier_eth">@Cavalier_Eth</a><br />
<strong>Reviewed by:</strong> <a href="/u/matthew_graham">@Matthew_Graham</a> , <a href="/u/jdcook">@jdcook</a> , <a href="/u/overanalyser">@overanalyser</a>, <a href="/u/mel.eth">@mel.eth</a><br />
<strong>Discussions-to:</strong><br />
<strong>Created:</strong> 19 November 2021</p>
<h2>
<a name="foreword-1" href="#foreword-1"></a>Foreword</h2>
<p>We’d like to acknowledge the great work of <a href="/u/pepperoni_joe">@pepperoni_joe</a> and the many others who have been blazing a trail with <a href="https://gov.indexcoop.com/t/index-2-0-leadership-governance-and-decision-making-pods-nest-and-wise-owls/3214">Index 2.0 | Leadership, Governance, and Decision Making <span>7</span></a>. We believe that their efforts will make cross-functional decisions like the one this IIP aims to address a whole lot easier in the future. This IIP should be viewed as independent but wholly compatible with the Index 2.0 vision.</p>
<h2>
<a name="summary-2" href="#summary-2"></a>Summary</h2>
<p>Index Coop’s mission is to make crypto investing simple, safe, and accessible for everyone. Product growth is a core pillar to achieving that mission. Without sufficient liquidity, our index products are less compelling to customers and product adoption is hindered. This slows our growth as a business and the negative effects only compound over time.</p>
<p>There have been many discussions on how to improve liquidity for our products, as well as the INDEX token. These conversations have tended to focus on how to improve liquidity for a specific product in a specific way. Despite good intentions and lots of trying, we’ve been unable to move quickly to solve our liquidity problems, as there is no clear authority or mechanism except IIPs for each suggested strategy.</p>
<p><strong>We propose that the community grant broad executive power to a group of owls to manage liquidity for all products and the INDEX token</strong>. The specific goals they set and how they go about achieving those goals should not have to go to IIP every time they want to take action.</p>
<h2>
<a name="motivation-3" href="#motivation-3"></a>Motivation</h2>
<p>As of Nov. 19, 2021, the approximate USD trade size on <a href="http://1inch.exchange">1inch.exchange</a> for 1% slippage on Index Coop tokens are:</p>
<div>
<table>
<thead>
<tr>
<th>All prices paired against ETH</th>
<th>Mainnet</th>
<th>Polygon</th>
</tr>
</thead>
<tbody>
<tr>
<td>DPI</td>
<td>$127,000</td>
<td>$3,000</td>
</tr>
<tr>
<td>ETH-2x FLI</td>
<td>$760,000</td>
<td>$0</td>
</tr>
<tr>
<td>BTC-2x FLI</td>
<td>$100,000</td>
<td>$0</td>
</tr>
<tr>
<td>MVI</td>
<td>$21,000</td>
<td>$3,300</td>
</tr>
<tr>
<td>BED</td>
<td>$30,000</td>
<td>$0</td>
</tr>
<tr>
<td>DATA</td>
<td>$8,000</td>
<td>$0</td>
</tr>
<tr>
<td>INDEX</td>
<td>$25,000</td>
<td>$0</td>
</tr>
</tbody>
</table>
</div><p><em>Note: 1% slippage includes fees to liquidity providers which is typically 0.3%. Liquidity can change significantly from day to day.</em></p>
<p>We can see from the table above that some of our products suffer from illiquid markets. Users are facing significant slippage, and anecdotally choosing not to invest rather than start their position at a loss. This is made worse by the high gas costs on mainnet. Some of our products can be found on Polygon, but there’s not enough liquidity available to make it a viable alternative.</p>
<p>Liquidity also comes into play when we launch new products. Having initial liquidity is important for getting early adopters. It’s a chicken and egg problem. If we don’t have liquidity on new products, no one will want to trade. And if no one is trading, then there are no fees to attract liquidity providers.</p>
<h2>
<a name="what-can-we-do-about-it-4" href="#what-can-we-do-about-it-4"></a>What can we do about it?</h2>
<p>The short answer is a lot, maybe even too much!</p>
<p></p><div><a href="https://global.discourse-cdn.com/standard10/uploads/theindexdao/original/2X/5/5a4e2bf1a70855e0349bda3805a61cf31e8c82d0.png"><div>
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<p>The toolbox for managing liquidity is expanding rapidly as DeFi matures. While this should be a good thing, too many choices are leading to analysis paralysis. This is magnified when trying to reach consensus among a large group of stakeholders.</p>
<p>It’s clear that we need a better process for making liquidity decisions and that process should favor decisiveness and action. The clearest way to do this is through delegated responsibility to a Liquidity Pod.</p>
<h2>
<a name="scope-5" href="#scope-5"></a>Scope</h2>
<ul>
<li>Pod will have the ability to draw funds as needed from the <a href="https://gov.indexcoop.com/t/iip-99-update-operations-account-multi-sig-2/3044">Operations Account Multi-Sig <span>2</span></a>
<ul>
<li>Precise funding amount will be determined as part of a broader budgeting process</li>
</ul>
</li>
<li>Pod will set liquidity goals for new and existing products</li>
<li>Pod will decide the best way to reach those goals</li>
<li>Pod will execute the transactions, deploy rewards contracts etc.</li>
<li>Pod will make a liquidity performance dashboard available, and log decisions</li>
</ul>
<h2>
<a name="who-will-be-in-the-liquidity-pod-6" href="#who-will-be-in-the-liquidity-pod-6"></a>Who will be in the Liquidity Pod?</h2>
<p>It’s important that the pod is a cross-functional team. Making quality decisions around liquidity requires an analytical skill set and a high degree of specialized knowledge. It also requires balancing growth with financial discipline. Members of the following working groups will be included in the decision-making process:</p>
<ul>
<li>Analytics</li>
<li>Growth</li>
<li>Product</li>
<li>Engineering</li>
<li>Finance</li>
</ul>
<p>Inside of the pod, decisions could be made using the RAPID framework. An example RAPID could consist of:</p>
<ul>
<li>Analytics will <strong>Recommend</strong>
</li>
<li>Growth will <strong>Agree</strong>
</li>
<li>Engineering and Operations Multi-Sig signers will <strong>Perform</strong>
</li>
<li>Finance and Methodologists will provide <strong>Input</strong>
</li>
<li>Product will <strong>Decide</strong>
</li>
</ul>
<h2>
<a name="closing-remarks-7" href="#closing-remarks-7"></a>Closing Remarks</h2>
<p>We have the expertise within Index Coop to manage liquidity, but without a clear delegation and decision-making framework, spirited discussions often result in no action. We want our experts to be able to work through options, run experiments, and get results without the friction of going through the IIP process. For the success of Index Coop, it is crucial we empower the right group of people to meet our liquidity needs.</p>
<h2>
<a name="voting-8" href="#voting-8"></a>Voting</h2>
<p><strong>For</strong></p>
<p>Form a Liquidity Pod with the authority to spend from the Operations Account to set and achieve liquidity goals for new products, existing products, and the INDEX token.</p>
<p><strong>Against</strong></p>
<p>Do not form a Liquidity Pod.</p>
<h2>
<a name="temperature-check-poll-9" href="#temperature-check-poll-9"></a>Temperature Check Poll</h2>
<div><div><ul><li> <span>For</span></li><li> <span>Against</span></li></ul></div><div><div><div><span>38</span><span>voters</span></div></div><ul></ul></div><div><span>Results</span></div></div>
<p>Please leave any feedback in the comments!</p>

POLL ADDED Proposal: Engineering Working Group Request for Funding

PROPOSED: IIP-110: Forming a Liquidity Pod

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