Index Coop (INDEX)

Index Coop is a DAO that issues tokenised trading strategies on Ethereum and two of its layer-2 networks, Arbitrum and Base. Each product is an ERC-20 token that holds a managed position: today these are leverage tokens, which borrow on Aave or Morpho to hold two or three times the exposure to ETH, BTC and other assets, or the inverse, and "smart loops", which borrow repeatedly against a yield-bearing asset to multiply its yield. It began in 2020 as the governing body of the DeFi Pulse Index, one of the first on-chain index funds, and over five years moved from passive baskets to products that are, underneath, automated borrowers on money markets. For a DAO reader it is a long record of a token-holder organisation running a product business: holders of $INDEX vote on Snapshot, a small paid team executes through multisigs, and the votes have covered launches, fee changes, the hibernation of the original index funds and, in 2025, burning a tenth of the token supply from the treasury.

From the DeFi Pulse Index to a DAO

The DeFi Pulse Index ($DPI) was built by Set Labs, the company behind Set Protocol, with DeFi Pulse, a DeFi analytics site, as its methodologist: the party that decides what the index holds. Its token contract was deployed on 9 September 2020 and the product was announced in mid-September as a single token holding ten Ethereum DeFi governance tokens, among them $COMP, $MKR, $YFI, $SNX and $BAL, weighted by market capitalisation.

Three weeks later Set Labs launched the Index Cooperative to own and run the product. The $INDEX token was deployed on 6 October 2020 with a fixed supply of 10m, distributed as set out in the Index Coop docs: 52.5% to a DAO treasury, most of it vesting over three years; 28% to Set Labs; 9% to a 60-day liquidity-mining programme for $DPI liquidity providers; 7.5% to a methodologist programme; 2% to DeFi Pulse; and 1% airdropped to existing $DPI holders. Two days later the founding team posted IIP-0, which set up Index Improvement Proposals (IIPs) on the model of Synthetix's and Yearn's proposal processes.

Liquidity mining and the 2021 bull market carried the products to a peak of about $551m in total value locked on 9 November 2021, by DefiLlama's count. The same year the DAO lent 1% of its token supply to the market maker Wintermute under IIP-83, a deal covered on OTC placements and market-maker loans. It was also an early user of Coordinape circles for peer-allocated contributor rewards.

In August 2022 Set Labs stepped back. Under the Index Coop – Set: Next Steps agreement, Set was to hand the treasury multisig to five Index Coop signers, among them the three directors of an Index Coop Cayman foundation, run as three-of-five; transfer 950,000 $INDEX from its own allocation; and allow Index Coop to redeploy Set Protocol "in good faith". The redeployment became Index Protocol, a fork of Set Protocol v2 that Index Coop alone uses for its own products, while $DPI and the other early indexes stayed on Set's original contracts.

From indexes to leverage

The leverage line started on Set Protocol as the Flexible Leverage Index tokens, ETH2x-FLI and BTC2x-FLI, and moved to Index Protocol in March 2024 as $ETH2x and $BTC2x. A product of this kind holds a collateral asset, borrows against it on a lending market, and rebalances automatically to keep a target leverage ratio, so the holder carries no liquidation threshold of their own. The leverage suite added 2x and 3x tokens and inverse tokens on Arbitrum from May 2024 and on Base from September 2024, then "ratio" tokens holding ETH levered against BTC and the reverse (IIP-187). From January 2025, under IIP-191, the core team may launch a leverage token without a vote, provided both the chain and the lending integration have already passed one.

The yield line runs on the same machinery. The High Yield ETH Index ($hyETH) began moving its allocation into Morpho in January 2025, and in April 2025 Index Coop launched its first smart loop, $wstETH15x on Base: it deposits Lido's wrapped staked ETH on Morpho, borrows ETH against it, and repeats until the position reaches 15 times, so the token earns the gap between the staking yield and the borrowing rate, multiplied.

The index funds went the other way. In March 2024 the DAO bought DeFi Pulse's successor company, Scalara, out of its 30% share of $DPI's fees for 45,000 $USDC (IIP-184). Ten months later IIP-190 stopped rebalancing $DPI, the Metaverse Index ($MVI) and the Bankless BED Index, and deprecated two staked-ETH indexes and a CoinDesk trend index. The proposal's case was that $DPI had run 13 consecutive quarters of net outflows once its incentives ended, and that the Set Protocol v2 contracts it ran on could not be upgraded to Index Protocol. It passed on 23 January 2025 and the legacy products page now lists $DPI as "Hibernated": holders keep their basket, which no longer tracks its methodology. In December 2025 IIP-196 raised the annual streaming fee on every remaining Set Protocol product to 5% from 1 January 2026, to cover the cost of keeping them redeemable and to push holders towards the current suite, and doubled the mint and redeem fee on the leverage tokens from 0.10% to 0.20%.

Governance: $INDEX, Snapshot and the multisigs

Every IIP is decided by $INDEX holders on the index-coop.eth Snapshot space; no vote is binding on-chain, and passed proposals are carried out by multisig. The documented process is a forum post, a 48-hour discussion minimum, and a 72-hour vote; posting to Snapshot directly needs 1,000 $INDEX, and holders below that ask a governance representative to post for them. The step-by-step guide sets a passing bar of 5% of circulating supply voting with a simple majority, and 10% with 60% for a new product. The space itself enforces a single quorum figure, which stood at 672,600 $INDEX through October 2025 and at 400,000 $INDEX for IIP-196 in December 2025. Voting power counts $INDEX held, $INDEX delegated through the token's own delegation function, and $INDEX still locked in two contributor vesting contracts. In October 2025 the DAO removed older delegation strategies from the space and told holders they might have to re-delegate on-chain.

Day-to-day running is delegated. An Operations Pod, a two-of-three multisig whose members were last changed by IIP-192 in February 2025, allocates resources and personnel; the treasury Safe that holds the DAO's $INDEX reads as three-of-four on-chain (read 2 Oct 2026); and product contracts sit under separate engineering multisigs.

Turnout is small and unanimous. Every IIP vote from IIP-190 in January 2025 to IIP-196 in December 2025 drew no votes against, from between nine and 14 addresses. Turnout decided outcomes twice: the first vote on IIP-194 failed on quorum with 457,102 $INDEX for and none against, and passed at a second attempt, and IIP-195 cleared its 672,600 quorum by about 2,100 $INDEX. For the general pattern see voter apathy.

Metagovernance through $DPI

Because $DPI held governance tokens, the DAO could vote them. Under the meta-governance process, a proposal in Uniswap, Compound, Aave, Balancer or Yearn was copied to the index-coop.eth space; $INDEX holders voted on the copy, closing 24 hours before the original; and if 5% of supply took part, the multisig cast the whole of $DPI's holding for the majority side through Set Protocol's governance module. Below that turnout a five-member elected Meta Governance Committee voted instead (IIP-51). The arrangement let holders of one token direct the votes of tokens owned by another group of people, the $DPI holders, the same structure Convex applies to Curve's vote-escrowed tokens.

It faded with the fund. In January 2025 a former contributor asked publicly who still controlled the metagovernance multisig. The reply from an Operations Pod member was that two of the three original signers had left and been replaced, that $DPI had lost about 80% of its share of the DeFi market since 2021, and that metagovernance had been deprioritised because holders showed "virtually zero demand" for it. The Snapshot space carried on mirroring Uniswap and Compound proposals into May 2025, most of them with one or two voters.

Treasury and supply in 2025–26

$INDEX pays its holders nothing: the docs say its value comes "primarily from being a governance token", and IIP-193 lists returning profits to holders as a future aim. The DAO's answer to holder pressure in 2025 was to destroy treasury tokens. IIP-193 sent 100,000 $INDEX, 1% of maximum supply, from the treasury Safe to a burn address on the first of each month from July to September 2025, and IIP-194 extended it by seven months. IIP-194 reported that the first three burns had shown no reliably positive effect on returns. On-chain, the burn address holds 1m $INDEX after ten transfers, the last on 28 April 2026; the token's reported total supply still reads 10m, because tokens sent to a burn address are not removed from the count. The treasury Safe holds about 1.55m $INDEX (read 2 Oct 2026). In the same months IIP-195 set aside 150,000 $INDEX for trading raffles through Merkl, a reward-distribution service, which one forum member argued would mostly be sold and depress the price.

The last monthly report, the December 2025 update posted on 16 January 2026, gave year-end TVL of $31.5m, a net outflow of $5.2m for the month, and a runway of about 11 months, and said reports would be quarterly from then on. No later report, Snapshot vote or forum proposal has appeared (read 2 Oct 2026), and the burn review IIP-194 scheduled for April 2026 has not been posted. The products are still run: the contracts repository added flash-mint support for its Arbitrum $AAVE2x and $LINK2x tokens in May 2026, the app disabled minting of its SOL, SUI and XRP leverage tokens on 22 May 2026, and DefiLlama counted about $17m locked on 2 October 2026, against $24.5m on 1 January and $8.7m on 1 July. For how organisations at this stage tend to end, see DAO wind-downs.

How Caper approaches this

Index Coop separates the decision from the act: $INDEX holders vote on Snapshot, and a few signers on a multisig carry the result out, so a passed vote binds only as far as those signers honour it, and the metagovernance episode shows that duty lapsing when attention moved elsewhere. In a caper the winning option of a proposal is itself the on-chain action, drawn from a fixed menu of treasury moves, and a spend runs only if the caper's own market does not veto it during its window. The two also differ on what a token entitles its holder to. $INDEX gives a vote and nothing else, which is why its holders were offered burns; a caper member who has voted can leave with a share of the treasury without anyone's approval, the exit right Index Coop never gave its governance token, and any holder can sell back to the bonding curve at any time. Index Coop does what a caper cannot. Its governance can price a fee, launch or retire a product line, buy out a partner's revenue share and run code on other chains' lending markets, and the holders of its products, as distinct from its governance token, have kept a right to redeem the underlying assets through every change, the hibernated index funds included. A caper's narrower menu of actions trades that range for a treasury that only its own votes can move.

References

Status	🟢 Active
Founded	2020
Website	indexcoop.com

Name	Index Coop (Index Cooperative)
Type	Structured-products DAO: leverage tokens and leveraged yield tokens built on Aave and Morpho; index funds until 2025
Founded	6 October 2020, by Set Labs; the $INDEX contract was deployed that day. Its first product, the DeFi Pulse Index, launched in September 2020
Governance token	$INDEX (ERC-20 on Ethereum, 10m maximum supply; 1m sent to a burn address in 2025–26)
Chains	Ethereum, Arbitrum, Base
Governance	gov.indexcoop.com forum · Snapshot (index-coop.eth) · execution by Safe multisigs. No on-chain governor
Scale	≈ $17m TVL (DefiLlama, read 2 Oct 2026), down from $551m on 9 Nov 2021
Status	🟢 Active – products minting and contracts maintained in 2026; no governance vote since December 2025 (read 2 Oct 2026)
Website	indexcoop.com