Is Index Coop Safe?
Risk Grade: B- (30/100)
Index Coop is rated as moderate risk — some novel mechanisms, generally well-understood.
Index Coop is one of the most established DeFi index providers with strong security practices (8+ audits, open source, bug bounty). The core index products like DPI offer genuine diversification value. However, the extremely low INDEX token FDV relative to governed AUM is a structural concern, and leverage products carry inherent volatility decay risk. Lower risk for index products, higher risk for leverage products.
Index Coop is a decentralized organization that creates crypto index funds, making it easy to get diversified exposure to DeFi and other crypto themes with a single token. Their flagship product, the DeFi Pulse Index (DPI), tracks top DeFi tokens in one basket, similar to how an S&P 500 ETF tracks stocks. They also offer leverage products like ETH2x that give you 2x exposure to Ethereum price movements through automated rebalancing. All products are built on Set Protocol smart contracts and charge a streaming fee similar to traditional ETF expense ratios. Eight-plus audits completed from firms like OpenZeppelin.
TVL
$15M
Mechanisms
7
Interactions
4
Value Grade
D+
Key Risks for Index Coop Users
Holding an index token means you are exposed to smart contract risk of every constituent protocol in the basket
Leverage products like ETH2x suffer from volatility decay, meaning they may underperform simple 2x leverage in choppy markets
The INDEX governance token has very low value relative to the assets it governs, creating a potential governance attack risk
Index rebalancing during market crashes can lock in losses by selling at the worst possible time
Top Risk Factors
- •Index tokens (DPI, MVI, etc.) hold baskets of underlying DeFi tokens, creating compounded smart contract risk across all constituent protocols
- •Leverage products (ETH2x, BTC2x) use automated rebalancing that can amplify losses during rapid market moves and may suffer from volatility decay over time
- •INDEX governance token has extremely low FDV ($2.8M) relative to protocol AUM, creating a potential governance attack vector where acquiring majority voting power is cheap
How Index Coop Compares to Peers
Index Coop ranks #17 of 68 DeFi protocols (top quartile — safer than most). At a risk score of 30/100, it's 6 points safer than the sector average of 36/100.
Adjacent peers: Summer.fi Pro (B-, 29/100) is ranked just safer, and Blur (B-, 30/100) is ranked just riskier.
See the full DeFi sector leaderboard or the Index Coop vs Blur comparison.
Common Questions about Index Coop
Plain-English answers based on Index Coop's scores across Hindenrank's 8 risk dimensions. The highest-scoring (riskiest) dimension is Vitality Risk (9/10).
Has Index Coop ever been hacked or exploited?
Index Coop has a fairly clean operational history. The track record dimension scored 4/15, indicating minor or no significant incidents on record. A clean track record is a positive signal but it does not guarantee future safety, especially as protocol complexity grows.
How much money is at stake in Index Coop?
Index Coop currently holds roughly $15M in user deposits. Smaller TVL means individual depositors carry a larger share of any loss event, and it can be harder to exit a position quickly during stress.
What's the worst-case scenario for Index Coop?
Hindenrank has identified specific collapse scenarios for Index Coop. The most prominent: "Governance Capture via Cheap INDEX Acquisition". The trigger condition is Attacker acquires majority INDEX voting power at low cost to manipulate protocol parameters or drain treasury. Reading through the full scenario list on the protocol page is the single best way to understand the actual failure modes — generic "smart contract risk" is rarely the thing that takes a protocol down.
Is Index Coop regulated or insured?
Index Coop has low regulatory exposure on Hindenrank's framework (2/10). The protocol is structured in a way that minimizes counterparty and jurisdiction concentration, though regulatory risk in crypto can change rapidly. No DeFi protocol carries FDIC-style insurance — even with low regulatory risk, depositors are not protected in the way bank customers are.
What are the biggest red flags for Index Coop?
Hindenrank's retail-focused risk audit flagged: Holding an index token means you are exposed to smart contract risk of every constituent protocol in the basket Leverage products like ETH2x suffer from volatility decay, meaning they may underperform simple 2x leverage in choppy markets The INDEX governance token has very low value relative to the assets it governs, creating a potential governance attack risk
Should beginners deposit into Index Coop?
Index Coop is rated B-, which is acceptable for users who understand the protocol's mechanism. Beginners should read the full risk breakdown and only deposit after they can articulate the top three failure modes. If you cannot explain how the protocol works, do not deposit.
How does Index Coop compare to safer DeFi alternatives?
Index Coop is one protocol in Hindenrank's DeFi coverage. The safest DeFi protocols on the leaderboard tend to share three traits: a long incident-free track record, conservative mechanism design, and high-quality public documentation. Compare Index Coop against the full DeFi ranking before committing capital.
For the full 8-dimension score breakdown, the radar chart, and dependency graph, see the Index Coop risk report.
Read the Full Index Coop Risk Report
This protocol has 2 collapse scenarios. 1 high-severity interaction risks identified. See the full mechanism classification, interaction matrix, and deep-dive recommendations.
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