Index Coop

Index Coop is a DAO-governed protocol that issues automated leverage and yield-bearing structured products as ERC-20 tokens on Ethereum, Arbitrum, and Base. Its Leverage Suite provides multi-collateral leveraged exposure (up to 3x long and 1x inverse) to assets such as ETH, BTC, SOL, SUI, XRP, LINK, AAVE, and gold via automated positions on Aave V3, while its Earn products (hyETH, wstETH15x, icETH) amplify staking and lending yields using looping strategies on Aave and Morpho. The protocol abstracts away the complexity of managing collateralized debt positions, rebalancing, and liquidation risk into a single token that any DeFi user can mint or redeem.

Index Coop makes yield in two main ways, each with its own product family.

Leverage Suite (Trade tokens like ETH2x, BTC3x)

These tokens give you leveraged price exposure to an asset — up to 2x, 3x, or even inverse (betting on a price drop). Here is how it works:

• When you mint (create) a leverage token, the protocol puts your money into Aave V3 (a lending pool) as collateral, borrows a stablecoin against it, swaps that borrowed amount for more of the target asset, and repeats this loop until the desired leverage is reached.
• Keeper bots and a "ripcord" system watch the leverage ratio constantly. If it drifts too far from the target, they rebalance automatically to prevent a liquidation.
• Your return comes from the price change of the leveraged asset, minus the "Cost of Carry" — that is, the difference between the interest your collateral earns on Aave and the interest you pay on the borrowed amount. Unlike perpetual futures, there are no funding rates; the cost is just Aave's floating borrow rate.
• Fees: A yearly management fee (3.65% for 2x/inverse, 5.48% for 3x), plus 0.10% to mint or redeem. Rebalancing also costs small DEX swap fees (e.g., 0.05% on Uniswap V3) plus market price impact.

High Yield ETH Index (hyETH)

This product puts WETH into a Morpho lending vault managed by Gauntlet. Gauntlet chooses where to lend, mostly targeting Pendle Principal Token markets that offer fixed yields higher than Lido's staking rate (around 3%). The vault follows safety rules: no single market gets more than a third of the funds, each market must have at least $5M in it, and the loan-to-value limit stays above 91.5%. Yield comes from lending spreads on Morpho plus any extra protocol rewards.

Fee: 20% performance fee only (no yearly fee, no mint/redeem fee).

Staked ETH 15x Smart Loop (wstETH15x)

This product runs on Base (a layer-2 network). It deposits Lido wstETH as collateral on Morpho Blue, then repeatedly borrows WETH against it to create 15x leverage on staking rewards. The system auto-rebalances when leverage moves outside a tight range (roughly 14.7x to 16.4x) and corrects fully in one go.

Fees: 0.75% yearly, 0.10% to mint or redeem.

Interest Compounding ETH Index (icETH)

This product deposits Lido stETH into Aave v2 as collateral, borrows WETH, swaps for more stETH, and deposits again — building about 2.75x leverage on staking rewards. Yield comes from the gap between stETH's staking rewards and the cost of borrowing WETH on Aave. Under normal conditions, it rebalances every 4–6 months.

Fees: 0.75% yearly, none to mint or redeem.

Index Coop is backed by a group of prominent crypto and venture capital firms displayed on its official website. The "Backed by" section on the homepage lists: Galaxy Digital, 1kx, Defiance Capital, Wintermute, Collider, Sequoia, White Star Capital, and 1confirmation. No specific fundraising rounds, amounts, or dates are disclosed on the main website or documentation pages reviewed.