How to Earn with a DeFi Index Automating Cashflows by Defi Dad

In the past, I’ve covered lots of developments in DeFi indexes. With new teams shipping new protocols, tokens, and applications, it feels impossible to track every development and ultimately how to pick winners vs losers in a sea of tokens. Like in traditional finance, an index is a great way to gain broad exposure to the upside in a market.

In DeFi, where permissionless protocols are the building blocks, governance tokens are the voting rights to dictate the future of those building blocks. Over the last 6 months, those same governance tokens have proven to be both powerful and valuable based on market buying activity.

Enter PowerPool--a protocol dedicated to aggregating governance power, through a new meta governance. PowerPool the last several months has been developing a new decentralized ETF-like DeFi index with 8 underlying governance tokens, called PowerIndex (PIPT):

12.5% YFI

12.5% AAVE

12.5% UNI

12.5% SNX

12.5% COMP

12.5% MKR

12.5% wNXM

12.5% CVP (the governance token of PowerPool)

PIPT’s price depends on the price of these 8 tokens and this token index PIPT can only be issued by either i) supplying liquidity into the PowerIndex or ii) by buying PIPT in the 80/20 PIPT/WETH Balancer pool linked here.

You might recall that there are other DeFi indexes that already exist, such as the DeFi Pulse Index with $30M in liquidity, sDEFI by Synthetix, and others like DEFI+L and DEFI++ by PieDAO.

What makes PIPT special beyond simply holding a portfolio of DeFi governance tokens as one PIPT token?

1. You