FOREFRONT Community call

29 November 2021

⏰ We start at 3 minutes after the hour ⏰ 🚨 This meeting is being recorded 🚨

Call Technicalities & Agenda

@Host

Technicalities

• Please stay muted unless you’re speaking.
• We will use the +1 system to initiate speaking
• This meeting is timeboxed to 1 hour - further discussion can go in the forum

Purpose: An opportunity to learn more about the proposed product

Agenda

• Introduction
• Presentation from Methodologist
• Prepared Q’s
• Wrap with open floor

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Mission: We’re on a mission to make crypto investing simple, accessible, and safe for everyone.

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How do we do that? We focus on 3 core pillars

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• Product growth: Our products must provide deep value to users & distribution must be a core competency.

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• Community autonomy: Empower contributors of different commitment levels to produce impact for Index Coop stakeholders

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• Protocol sustainability: Ensure the Coop is built to last. This is done through treasury management, value capture, governance, and product + growth + community.

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Index Coop Mission & Strategy

Principles

• We work together towards shared goals: Contributors feel progress is being made together, and they are rewarded for it.

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• We’re on an never ending journey of growth & improvement: Contributors feel they can be additive in improving the current process

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• We foster a sense of belonging: Contributors feel like they are part of something they are proud/passionate about

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• We foster a sense of safety: Contributors feel they can communicate openly w/o judgment and/or personal remarks

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• We interact with empathy: Community members feel heard; Community members feel their concerns are taken into consideration during decision-making

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If at any point, we stray from these principles, please send feedback and we will endeavour to adjust

**Important Disclaimer**

In General. This disclaimer applies to this document and the verbal or written comments of any person presenting it. This document, taken together with any such verbal or written comments, is referred to herein as this “Presentation.” Index Cooperative, taken together with its affiliates, is referred to herein as “IndexCoop,” “we,” “us” or “our.” The material provided herein is for informational purposes only. It does not constitute an offer to sell or a solicitation of an offer to buy any interests in a fund or any other securities. Forward‐looking statements. The Presentation contains certain “forward‐looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, which reflect our current views with respect to, among other things, future events and the financial performance of IndexCoop. Readers can identify these forward‐looking statements by the use of forward‐looking words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “assumed,” “anticipates,” “positioned,” “targets” or the negative version of those words or other comparable words. Any forward‐looking statements contained in this Presentation are based, in part, upon the historical performance of IndexCoop and our affiliates and on our current plans, estimates and expectations. The inclusion of this forward‐looking information, should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. Such forward‐looking statements are subject to various risks, uncertainties and assumptions relating to our operations, financial results, financial condition, business prospects, growth strategy and liquidity. If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, our actual results may vary materially from those indicated in these statements. Accordingly, you should not place undue reliance on any forward‐looking statements. No reliance, no update and use of information. You should not rely on this Presentation as the basis upon which to make any investment decision. To the extent that you rely on this Presentation in connection with any investment decision, you do so at your own risk. This Presentation does not purport to be complete on any topic addressed. The information in this Presentation is provided to you as of the dates indicated, and IndexCoop does not intend to update the information after its distribution, even in the event that the information becomes materially inaccurate. Certain information contained in this Presentation includes calculations or figures that have been prepared internally and have not been audited or verified by a third party. Use of different methods for preparing, calculating or presenting information may lead to different results, and such differences may be material. Past performance. In all cases where historical performance is presented, please note that past performance is not a reliable indicator of future results and should not be relied upon as the basis for making an investment decision. Distribution of this Presentation. This Presentation is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use is contrary to local law or regulation.

Considerations

Via Product and Application Considerations

Marketing Benefit

Market Size

Product-Market Fit

Methodologist Capacity

Competition

Fees Generated

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Forefront

Social Token Index

Introduction

Mission

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Today’s Goals

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To launch a Social Token Index providing investors with passive exposure to the Social Token Industry.

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• Introduce Social Tokens
• Present Forefront’s Unique Value Add
• Introduce the Social Token Index
• Describe Index Methodology & Design
• Answer Questions

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About Forefront

Forefront’s platform is the leading insight aggregator across the social token landscape.

Feature Articles

Market Statistics

Resources

Podcast

FF Learn

Newsletter

About Forefront

Forefront has built tools to track numerous metrics on all major social token projects, including all of the underlying tokens of the proposed Index.

Motivation

POTENTIAL:

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DEMAND:

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UNIQUE:

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FF VALUE ADD:

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ALIGNMENT:

“My view, as I've stated many times, is that social/community tokens are going to be one of the biggest changes to global business models in history.” ~ Raoul Paul

Social tokens have potential to become the next ‘big-thing’ in crypto.

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Forefront is inundated with demand for an investment product.

There is nothing comparable in the market.

Forefront has built an entire ecosystem to support the index.

A major investor in both communities will support the index’s success.

What Are Social Tokens

“Social Tokens are the broad category of crypto projects that often includes Personal Tokens, Creator Tokens, Community and Brand tokens. They represent the value and ownership or relationship to a creator or community." - Jess Sloss, Seed Club

“A social token represents a fractionalized share in the intrinsic value of a community, brand, or human. It’s a form of the ownership economy giving participants exposure to the growth trajectory of whatever the community is clustered around as well as the potential to help shape that trajectory.” - The Defiant

Market Opportunity

• The current market cap of the underlying tokens in the index is $1.4B. If the Index captured 1% of that AUM would be $140M.

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• The number of addresses holding social tokens grew by ~200% from 6,000 to 19,000 in 2021.

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• There are no other similar products in the market.

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• Forefront is inundated with requests for a Social Token Index. We believe Index Coop’s research shows similar demand.

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• FF is aware of a pipeline of new social tokens set to launch, the market is growing fast.

Performance

• Forefront has built multiple models tracking and back-testing the index.

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• Forefront has built two Dune Analytics pages, tracking both this index and the social token industry as a whole.

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• The Index is up approximately 250% from July 1, 2021.

Composition

Weighting = 75% * Sqrt Market Cap Allocation + 25% * Liquidity Allocation

Criteria

General

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• The token must be an ERC20 that is available on the Ethereum blockchain.

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• The token must be associated with a decentralized social community.

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• The token must be listed on Forefront’s Marketplace and adhere to Forefront’s Marketplace selection criteria.

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• The project must have been launched at least 60 days before being able to qualify to be included in the index.

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Supply, Market Cap & Liquidity

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• It must be possible to reasonably predict the token’s supply over the next five years. 

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• At least 5% of the five-year supply must be currently circulating.

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• The token’s economics must not have locking, minting or other patterns that would significantly disadvantage passive holders.

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• The token must have a minimum fully diluted market cap of $25 million.

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• The token must have a 90-day average trading volume of at least $50k per day.

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• The token must have a minimum $10k trade requirement with less than 1% slippage.

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Social Metrics

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• The project must be a clearly established social community operating towards a shared goal.

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• The project must have at least 500 unique token address holders.

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• The project must have a large community (2000+ Discord members and/or Twitter followers).

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* All parameters subject to change

Liquidity

Liquidity of Underlying Tokens

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Liquidity weighting factor, slippage thresholds, and liquidity analysis are all discussions we look forward to having with Index Coop methodologists.

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We are aware of multiple Social Token communities pursuing liquidity strategies, this index will accelerate those plans.

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We would envision an STI/ETH Uniswap V3 pool with initial liquidity provisions from 1kx & FF, with possible support from IC and/or other external partners.

Liquidity of Trading Pair:

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$10K Trade:

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Dual goals of ensuring underlying tokens have the liquidity depth to enable a $1 million trade (issuance or arb) and a $10,000 trade per token with less than 1% slippage.

Further Discussions

Index Maintenance:

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Meta-Governance:

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Exit Strategy:

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Streaming Fee:

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Next Steps:

Monthly rebalancing

Up for discussion with IndexCoop

Discussion of emergency exit provision if there’s an issue with underlying token to be had with IC methodologists.

Fee % to be discussed, but we would envision an even fee split between FF and IC DAOs.

TBD

Q and A

Owner:

Questions & Answers

• Is there a reason for 7 tokens vs a larger spread?
• Cut off based on $50 K trading volume.
• Likely to be revised based on INDEXcoop guidance.
• Do you see a problem with underlying liquidity
• Expect underlying communities to build liquidity when requirements are known
• How do social tokens get added?
• Initially FF advisors knew what was happening
• Now a listing process to allow people to submit.
• Expect millions of tokens - needs curation.
• If the goal of a social token is to participate - whats happens to the FF index token holders - do they lose the benefit?
• Case by case basis on the community - token gating considerations.
• FF is active in other social token goveranace

Questions & Answers

• How do we prevent excessive dilution of passive holders?
• Initial parameters are open to review (5% circulating is agreed to be low).
• Need to make the differentiation between governance vs social tokens
• How do help grow the market?
• FF are considering role - port of entry for going forward - mass market
• FF community is interested in building DAO’s - Audience is much broader.
• How is “Social token” definition going to develop as market matures?
• How do you monitor product market fit over time / what if projects die?
• Track social and governance metrics.
• What is going to be the main selling point for these tokens?
• Price may not be the focus, but few projects are targeting a dropping price.
• Communities want to build value.
• FWB is token gated by Token - price locked out new entrants.
• Tokenomics may change - deselect for

Questions & Answers

• Will projects stay on main net - migrate to L2?
• Will they maintain L1 liquidity?
• Can not use NFT based products.
• FF holds the tokens of many projects - would you prefer to hold the product?
• FF would like to hold asset value AND governance influence - so depends on how product works.
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Other Topics

Speaker: Open Discussion

Open Forum (If Time)

• Other proposal for DAO token - How do we differentiate between them? / will they cannibalise?
• Social token index is a tighter theme - similar to existing coop products.
• So social token is a better complement
• $WHALE is also in MVI and FF social token - overlap?

Archive

• DON’T forget to stop the video