AMKT-IP-4: Drop AMKT Expense Ratio to 0%, Replace Fees With Staking Income

Proposals
3

Thanks @cyp!

  1. The proposed model is for the ETH portion of the index to be allocated to 50% stETH, where AMKT holders get 100% of the rebase (-lido’s fee), and the other 50% of the ETH allocated to Alongside Staked ETH, a contract we wrote that would route the ETH staking rewards to the Alongside Foundation.

  2. Yes, the thought is that this can be expanded to other PoS assets as they comprise more % of the index

  3. Right now, AMKT charges a 95 bps expense ratio, which we propose taking to zero here. On $3.8m in TVL (TVL at time of writing) this annualizes to ~$36,000. Under the proposed model, the expense ratio fee is zero and we’d capture 1/2 of the ETH staking rewards. ETH is ~23% of the index right now ($874k) and with a 3% staking yield that’s ~$26k ($13k would accrue direct to holders, $13k would go to Alongside Foundation) so at present this would cut our take rate by roughly 2/3. Index products tend to be winner take most in nature, so securing being the most liquid broad based index is super important and the goal is to make up for that take rate loss in the form of higher TVL.

Curious what you think! Appreciate the thoughtful questions.

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