Index Coop Review

How Index Coop scores in DeFi protocols

This entry rates Index Coop, the DAO that issues tokenized leverage and ETH-yield strategies (ETH2x, BTC2x, hyETH, icETH and others) on Index Protocol and Set Protocol v2, in our DeFi protocols ranking. The basis is desk research of the Index Coop handbook, its security page, its terms and its GitHub repositories, checked on November 1, 2026. No token was bought or redeemed. The category has five criteria, each marked 0 to 10 and weighted equally, as set out in our ratings methodology.

The overall score is the plain average: (8 + 8 + 8 + 7 + 3) / 5 = 34 / 5 = 6.8, up from 6.4 at the July 24, 2026 check. Three marks moved. Audit disclosure rose from 3 to 8: the July review found no named audit firm, but the handbook's security page now names six with their reports. Governance & control fell from 5 to 3, because the hyETH page documents a discretionary withdrawal power and no executor or timelock is stated for passed votes. Licence & code openness moved from 9 to 8. Both follow scales applied across the category on November 6, 2026: an open-source grant made only in file headers scores 8, and governance with no stated executor or timelock scores 3.

Strongest criteria

Licensed code and named auditors (8 and 8)

The index-coop-smart-contracts repository carries an Apache 2.0 licence file. The contracts in the index-protocol repository, Index Coop's fork of Set Protocol v2, carry Apache 2.0 headers in each file. That repository has no LICENSE file of its own, and its package.json says MIT. Because the live code grants Apache 2.0 only through file headers, the mark is 8, the category's step for an open-source grant without a licence file. On audits, the security page maps each firm to the contracts it reviewed. Sherlock covered the core contracts, leverage extensions and modules in two contests. OpenZeppelin and ABDK reviewed the Set Protocol v2 core. 0x52, Code4rena and iosiro covered specific modules and oracles. Current reports are kept in the IndexCoop/audits repository. The mark stops at 8 rather than 10 because the page gives no audit dates, so a reader cannot tell which reports match the code now deployed.

Fees stated per product (8)

Every current product page gives its streaming, issue and redeem fees. A 3.65% streaming fee on a $10,000 ETH2x position costs about $365 a year at constant value. That is before the Aave borrowing cost inside the strategy, which is not a published fee. The mark is not higher because there is no single schedule, and hyETH's page gives a 20% performance fee without saying how or when it is charged.

Weakest criterion

Governance and control: partly a gap, partly a deficiency (3)

Two different problems sit under this mark. The gap: the IIP page describes discussion and voting but not who executes a passed vote, what multisig holds contract permissions, or any timelock. Snapshot votes are off-chain signals. The deficiency: the hyETH page says Index Coop keeps "ultimate control" and can withdraw assets from the Morpho vault at any time if it sees a material risk. It can also choose a new risk manager, and only the most material changes go to an INDEX vote. That power may protect holders in a crisis, but it is discretionary and not bound by a stated delay. The terms of service name no legal entity, only "Index Coop" and related parties, under Cayman Islands law. The category gives 3 when execution and any timelock are not stated, as for Ondo Finance and Synthetix; dHEDGE gets 4 because its docs at least state that a multisig executes votes.

What the score does not cover

The score measures disclosure. It does not measure how closely a leverage token tracks its target ratio, rebalancing costs, Aave borrowing rates, or hyETH's yield. Leverage tokens can lose far more than the underlying asset over volatile periods, because the ratio drifts and is rebalanced. Each product also carries the risks of the protocols it uses: Aave, Morpho, Lido and Pendle. Index Coop treats US persons as restricted for every current product and says the tokens are not registered under the Securities Act of 1933. Our risk management guide explains how leverage changes position sizing.

Index Coop vs dHEDGE and Reserve

dHEDGE, now Chamber, scores 7.8. It leads Index Coop on licence (10 against 8), audits (10 against 8), mainly because its audit archive is dated, and governance (4 against 3), because it states that a multisig executes votes. It ties on fees (8) and backing (7). Reserve, the other tokenized-basket protocol in this ranking, scores 8.0. It ties Index Coop on fees (8) and backing (7), and leads on licence (10 against 8), audits (9 against 8) and governance (6 against 3), because it states a default 48-hour timelock. dHEDGE, like Index Coop, states no timelock on contract control. Ondo Finance also scores 6.8; Index Coop is listed first only because ties are ordered alphabetically.

Who it suits

On these marks, Index Coop suits non-US users who want a packaged leverage or ETH-yield position with published fees, licensed code and named auditors, and who can check the token and module contracts themselves. It suits less well anyone who needs to know who executes governance decisions, or who is uneasy with the issuer's discretionary control over hyETH's assets.