Authors:
@azeem Head of Impact at Gitcoin
@funkmasterflex Partnerships at Index Coop
Summary
The Gitcoin Staked ETH Index (gtcETH) is a token created by Gitcoin and Index Coop to allow holders to accrue staking yield and contribute to public goods funding. We are requesting feedback from NounsDAO regarding gtcETH and are proposing that a percentage of the ETH Treasury be allocated to gtcETH.
Motivation
NounsDAO has long been in discussion over the vision of the treasury. Should the treasury act like a hedge fund or more like an endowment funding impactful projects? Gitcoin and Index believe that both are possible. NounsDAO has significant staked ETH holdings, has funded Gitcoin grants, and most importantly is ideologically aligned around growing the entire ecosystem. Our teams believe that gtcETH within the treasury can allow Nouns to compound staking yield and fund public goods in perpetuity.
Specification
The objective of gtcETH is to enable token holders to access the top ETH liquid staking tokens with a single token while simultaneously contributing to public goods funding.
The methodology is the same as Index Coop’s Diversified Staked ETH Index (dsETH), with a weighting that favors decentralized liquid staking protocols as measured by the number of node operators as well as the distribution of stake across node operators. Constituents are equally weighted before adding a Node Operator Factor, which benefits staking protocols with more active node operators. An HHI (or Herfindahl-Hirschman Index) Factor is then added, which measures the concentration of stake and broader competition amongst active node operators within each protocol. For more information on gtcETH visit the product page and find real-time analytics here.
With the current diversified staking rate of 4.05% minus the 2% fee to Gitcoin and Index Coop, gtcETH is currently at a 2.05% APR
The diagram below explains the flow of yield from gtcETH to Gitcoin grants
gtcETH Token Address: 0x36c833Eed0D376f75D1ff9dFDeE260191336065e
gtcETH/dsETH Secondary Market Liquidity Uniswap Info
Implementation
The Nouns community can utilize self-issuance directly through the Index Coop app for large buys. This can be done with little price impact, accessing the largest ETH pools in DeFi for no fee. Further analysis on trade execution can be performed once potential sizing is understood.
Temperature Check
We would like to gather feedback from the community about this post and invite Nouns holders to discuss how a treasury diversification could benefit the DAO.