DeFiPulseIndex (DPI) is an ETF index fund for DeFi that consists of 12 DeFi component tokens. In our previous article in October, titled "INDEX Owl: Building a DeFi benchmark like TVL," we started tracking DPI when it attracted around $10 million in DeFi investment. In the latest update, we saw that DPI has now attracted $20 million in funds – the DeFi index fund is growing rapidly.

We are interested in DPI because we believe that ETF index funds are user-friendly investment tools for individual investors. In the traditional financial industry, ETFs have a huge market space, and even fund managers earn significant income through low fees. This is why we are considering integrating ETFs into CirclesUBI through UBI.city. The governance power brought by UBI.city could further accelerate the development of DeFi ETFs and DeFi.

In addition to the similarities with traditional financial ETFs, DeFi offers the ability to earn profits through liquidity mining and convenient mechanisms for collateralized lending. Therefore, DPI, as a DeFi ETF, can generate more profits from these two aspects. Combined with the universality of ETFs, this could become a new trend – a way to maximize internal and external returns based on an index fund.

This is a method of combining multiple DeFi elements to create something more complex but with the individual properties of each DeFi component. We present a system combination concept, but since this is DeFi, it can also be used individually based on preferences.

The system includes three key DeFi components:

1. DPI, a market-capitalization-based index fund 2. MakerDAO's $DPI Vault, a collateralized lending platform 3. $DPI Vault, a yield optimization tool

The basic external revenue generation method is shown in Figure 1, which aims to allow the diversified fund to fully utilize the passive revenue generated by liquidity mining and provide more protection in bear markets.

Note: External revenue generation does not require locking in DPI. Users can also directly deposit DPI into Yearn or Maker Vaults for liquidity mining if they wish to be more proactive.

The complete process outlined in the concept requires the following steps:

1. Users deposit underlying component tokens into the DPI issuance contract and receive newly created DPI tokens. Alternatively, users can also purchase DPI on the secondary market on Uniswap. 2. Users lock DPI in a contract with a predetermined lockup period, such as 28 days. 3. The collateral controller (INDEXcoop) withdraws DPI and places it into the Yearn DPI Vault. 4. The Yearn DPI Vault deposits DPI into the Maker Vault, obtaining DAI, and continuously monitors to maintain the required collateral ratio. 5. DAI is deposited into the Yearn DAI Vault to generate revenue, which is used to pay DAI stability fees and purchase DPI from the yDPI Vault. 6. INDEXcoop can further perform additional operations to capture inherent returns from underlying tokens.

In parallel with steps 3 to 5, the DPI Vault Manager (INDEXcoop) removes some underlying tokens from the Vault and places them into the DPI Farm. The DPI Farm distributes tokens to ensure opportunities for revenue generation through various protocols (governance staking, AAVE, Compound, Yearn Vaults, etc.). Additionally, INDEXcoop can use tokens within the Vault and those in the farm to participate in governance voting.

The overall revenue structure is shown in Figure 2:

Users can benefit from:

1. Protection in bear markets, as diversified DeFi funds have more risk-bearing capacity. 2. Income from the Yearn vaults. 3. Income from the DPI Farm. 4. Time and effort savings compared to executing each step individually. 5. Automatic protection of Maker Vaults from liquidation through the Therren Vault with an Oracle whitelist.

The benefits of the DPI protocol compared to a single token include reducing volatility and obtaining downside protection, as shown in Figure 3 and Table 1.

Maker gains additional collateral types, more generated DAI, and related stability fees (approximately 2-4%).

Yearn gains additional vaults and fee income (approximately 2% AUV + 20% of generated profits).

INDEXcoop receives DPI service fees (0.95% of AUV) and a portion of DPI Farm revenue.

The DPI Vault currently holds about $20 million, which means there are 220,000 DPI tokens. The ongoing liquidity mining for INDEX and Sushi on Uniswap for DPI-ETH is driving this trend. Furthermore, the earning capabilities of the inherent DPI Farm and external Yearn vaults are expected to drive the adoption and issuance of DPI.

Key constraints in the system include:

1. INDEXcoop, Yearn, and MakerDAO communities need to implement different strategies through proposals, determine relevant parameters and incentives. 2. Time synchronization is required to allow INDEXcoop to safely remove tokens from the DPI Vault. Using time locks in DPI staking means that the DPI Vault can have 100% circulating DPI, ensuring sufficient liquidity to prevent redemption. 3. The DPI Farm is complex, with 11 tokens requiring monthly rebalancing and the need to capture revenue from DPI stakers and INDEXcoop. 4. Yearn Vaults must utilize the Maker vault strategy. Using lending platforms to generate income and stable tokens allows borrowing and redemption of DPI. This offsets the advantage of DPI staking time locks to increase inherent returns. 5. Smart removal of DPI from the collateral contract can be challenging and requires significant development time. A multisig contract can be used (at least initially) or can be implemented without Yearn Vaults. 6. Additionally, the protocol must have contingency measures for failures (INDEX staking, collateral, etc.).

About UBI.city: UBI.city is a protocol for future organizational structures. We will release more ideas and design mechanisms about UBI.city in the near future. We welcome blockchain enthusiasts, community initiators, research analysts, and Gavin & Iris to discuss the possibilities of UBI together.

About ChinaDeFi: ChinaDeFi.com is a research-driven DeFi innovation organization. We strive to provide decision-making support materials by searching for more in-depth and systematically organized content from over 900 articles from more than 500 high-quality sources worldwide to synchronize it with the Chinese market as quickly as possible.

熱點(diǎn)：etf pi 中幣 中幣網(wǎng) 幣網(wǎng)