This is the eighth of a series of 12 discrete stories about how a variety of web3 projects (ranging from crowd-funding platforms and NFTs to DeFi and gaming) have approached decentralized community building. You can read an aggregated overview of insights across all of these projects here.
Index Coop Community Synopsis
decentralization spectrum:
Fully Decentralized ⬤ ⬤ ⬤ ⬤ ⬤ Fully Centralized
how it started: The First Index DeFi to “DAO-ify”
Following that now-notorious “DeFi summer,” Index emerged with the launch of DPI, the DeFi Pulse Index, in September 2020. The innovative launch of this early crypto index product (co-created with Set Labs) spurred interest from their first large customer subset – crypto investors interested in bluechip DeFi projects. Index’s user base quickly informed their community contributor base, and they took a leap of faith to become a DAO in order to let other people make decisions about what was next.
Buoyed by the collective energy around DeFi and the team’s decisive action to “DAO-ify” (still quite a novel concept at the time), a strong foundation around a new, decentralized community of finance & crypto-curious leaders, the Index Coop was formed.
I spoke with Brad Morris, the current leader of the “Community Nest” at Index Coop, which oversees human capital, resourcing, talent, HR, as well as tooling and operations about his thoughts on those early traction moments. He said, “People wanted to be part of a community where they could help inform the product as it was being built. The excitement and initial vision was to create decentralized financial products to unlock financial prosperity for everybody.” Like many projects in web3, their early success was due in large part to their quick traction around identifier their biggest proponents and advocates.
how it’s going:
Today, Index now features over a dozen sector index products, and their signature DPI product boasts a market cap of $27.8M, which includes top assets such as Uniswap, Aave, Maker, Loopring, and Synthetix.
With each additional product launch, a new sub-community niche emerges on Index, with each contributing in its own way to the DAO. As there is no CEO of Index, decision-making generally happens through a trickle-down matrix that includes the most senior members through an Index Council, followed by Nests (and Nest leaders), and Pod leadership.
Over time, the Index Coop has formed a reputation for being one of the most robust and easily accessible onboarding experiences to a new community member, regardless of your current familiarity with crypto or DeFi. Their Discord, now 15,000 members strong, is packed with healthy, thoughtful dialogue and debate on the mechanisms for how the organization should be managed.
Conversations with contributors today reflect the relative maturity of their build cycle framework compared to other, more nascent projects. They have introduced a few new mechanisms, including the idea of having their investors delegate their voting to a newly elected Leadership Council. The core team now works in seasons, “Seasons,” six-month sprints toward a new set of product launches or core objectives.
As the initial novelty and excitement wave has muted among their network, Brad noted that the questions around the community have shifted, too, much like they might internally at any company that morphs from startup to scale-up. Where community members and stakeholders initially threw spaghetti at the wall and asked, “What’s possible? What does this look like?” today’s focus is a bit more pragmatic: “How do we ensure financial profitability?”* *
why it worked:
Perhaps due in part to the novelty of the DAO DeFi model, Index attracted best-in-class community leaders, organizational design thinkers, and builders to come up with a robust system of onboarding, allocation of part-time and full-time work (through a mix of cash & tokens), bounty boards, and other engagement tactics. To date, they continue to maintain one of the most robust onboarding flows for new community users as well as a meticulously maintained Notion instance.
“The success of us as a decentralized organization (us becoming a successful organization as a DAO) is clear. We are profitable, we find product-market fit, we serve our customers, and we build a really great team and we help team members achieve their version of success,” said Brad. “We’re finding the balance between centralization & decentralization, pushing more toward decentralization as we go.”
Admittedly, this clarity of vision and purpose was largely achieved through a lot of “trial by fire” moments for the community. As one of the first fully decentralized DAO-operated businesses, Brad noted that they quickly realized some of the challenges of fully demographic decision-making.
“We went through an inability to make effective and quick decisions, and that really hurt us as a DAO.” They are now in a process of trying to build more for the customer through a product-based community and look for ways to move faster as they grow. “We just elected a leadership council; it’s really important to have agile decision-making. We trust these people to make a decision quickly, and it doesn’t have to go through everyone”
how decisions get made:
Core team (full-time hires)
Leadership council
Owl levels (Gold, Silver, Bronze) & $INDEX token holders: Proposals through Index Forum
top 3 web3 vibes:
First-mover advantage
Reputation as a place that attracts best-in-class community leaders
Accessibility (through documentation & onboarding)
advice to founders & builders in web3:
“There’s this healthy tension where full decentralization doesn’t work. If anybody can make decisions, people don’t have context. But fully centralized also doesn’t work because you aren’t leveraging collective intelligence in the middle. We are trying to leverage the middle ground between the two.”
– Brad Morris
Special thanks to Brad Morris for their contributions to this narrative. You can also view the complete repository of articles and references across all projects as part of this study.
