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
$14M
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
Risk Score Breakdown
Index Coop's highest risk area is Vitality Risk (9/10). Here's how each dimension contributes to the overall 30/100 score:
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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