A new decentralized finance (DeFi) investment and index fund platform is celebrating its mainnet launch in macabre fashion.
Enso Finance, a platform for building, sharing and trading index fund–style cryptocurrency portfolios, announced in a blog post plans for a vampire attack on six leading DeFi index platforms.
Vampire attacks in DeFi occur when a competitor to an incumbent protocol – often a fork of the “victim’s” code – offers superior incentives designed to entice users to move their deposits from one platform to another.
In Enso’s case, the platform is taking aim at Index Coop, TokenSets, dHedge, PowerPool, PieDAO and Indexed Finance, which account for nearly $500 million in total value locked (TVL) among them.
In an interview with CoinDesk, Enso founder Connor Howe declined to specify the type of APY users can expect upon migrating, but it will presumably need to be generous – many of the platforms Enso is looking to leech liquidity from already incentivize users with upwards of 30% APY in governance token emissions.
In addition to a liquidity mining program, Enso is also launching with a gamified dashboard, NFT rewards and will be covering the gas costs associated with migration. The team also hinted the NFTs could have additional utility in the future.
Once users have made the migration, Howe hopes that Enso’s various features and functionalities will be able to keep them around.
CoinDesk saw a demo of the platform that enabled users to build indexes out of a wide range of assets, yield-vaulted and revenue-bearing assets, and with other indexes as well, allowing them to create an “ETF of ETFs,” as Howe put it.
Index creators can also set performance fees as well as timelocks for how frequently index managers are allowed to swap assets into and out of the index. These indexes can also be controlled by a multi-sig, meaning that the product can operate as a treasury management solution as well.
“Anyone can create a strategy, and that’s the key differentiator here,” said Howe.
‘A fun experiment’
The index or structured-product market has largely lagged behind DeFi generally, accounting for just a fraction of the sector’s $280 billion in TVL. One possible reason is perpetually playing catchup: By the time a platform has created a new index, the market may have moved on to a new narrative.
It’s a pain point Enso is focused on in particular. One forthcoming feature called “recipes” will allow users to add any yield vaults and new contracts they want, allowing users to add new farms or yield-bearing strategies as they come to market.
The team also has a competition planned that will measure the performance of user-built indexes and reward top earners.
“It’s going to be a fun experiment,” Howe added. “The whole team’s excited to see this go live.”