# DGI Quarterly Rebalance Proposal — Constituent Weighting Update (No Basket Changes)
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This proposal implements the scheduled quarterly rebalance of DGI's constituent weightings in accordance with the DGI Weighting Policy and Review & Rebalance Methodology. Following review against the Constituent Inclusion Criteria, all six existing constituents continue to satisfy inclusion requirements and no basket changes are proposed this cycle. This proposal adjusts each constituent's target weight to reflect current market capitalization.
**Execution**
Upon approval and timelock expiry, rebalancing will be executed via the DTF's on-chain Dutch auction mechanism to transition the basket from current to target weights, minimizing slippage and market impact in line with standard DGI rebalance procedure. No changes to the auction launcher, trading parameters, or governance parameters are proposed.
**Constituent Inclusion Review
**All six constituents were reviewed against the Constituent Inclusion Criteria for this cycle and continue to qualify:
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- Offers services/products facilitating DeFi applications
- Minimum 180 days of operation with demonstrated adoption
- Market capitalization within acceptable range under current criteria
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No constituent triggered removal conditions (e.g., falling below the $10M market cap threshold or exceeding the $1B threshold outside the stated tolerance band).
**Voting**
- For: Approve the target weights above and authorize execution via Dutch auction.
- Against: Reject this rebalance; basket weights remain unchanged from the prior cycle.
- Abstain
# Resubmission: DeFi Growth Index (DGI) Quarterly Rebalance – Removal of CPOOL & EUL and Addition of YB
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This proposal is a resubmission as the previous proposals auction did not get executed.
Overview As part of the scheduled quarterly review of the DeFi Growth Index (DGI), we present the proposed constituent adjustments for the Q1 2026 rebalance. This review ensures that DGI continues to track innovative, early-stage DeFi projects with sustainable growth potential, in line with the index’s stated objective and inclusion criteria.
Based on the quarterly review, we propose:
Removal of Euler (EUL) due to stagnation in market share and intense competition from next-gen lending protocols.
Removal of Clearpool (CPOOL) due to the underwhelming performance of the Ozean launch and aggressive moves by competitors in the institutional credit space.
Addition of YieldBasis (YB), a novel BTC liquidity protocol that eliminates impermanent loss and demonstrates deep synergy with the Curve ecosystem.
Removal: Euler (EUL) Rationale:
Market Share Erosion: Euler’s growth has stagnated, with its market share shrinking throughout Q4 2025.
Competitive Lag: The protocol is being outpaced by competitors innovating rapidly in the lending space. Aave recently rolled out its umbrella model and v4 with expanding RWA markets; Morpho has successfully launched v2; and Fluid is capturing stable swap market share through its smart debt/collateral design.
Innovation Deficit: In this fast-moving environment, Euler currently lacks the distinct innovative elements required to reverse this downtrend.
Removal: Clearpool (CPOOL) Rationale:
Underwhelming Product Launch: The launch of Ozean, intended as the institutional liquidity layer for on-chain financing, has been somewhat underwhelming and failed to capture the expected market momentum.
Competitive Disadvantage: Competitors are executing more aggressive integration strategies. Maple Finance is actively expanding the reach of syrupUSDC and syrupUSDT by integrating them into new protocols like Midas and ecosystems like Plasma & Solana, effectively siphoning liquidity demand.
Market Positioning: Meanwhile, Wildcat is successfully pivoting to become a liquidity hub for on-chain hedge funds by working closely with on-chain risk curators such as Hyperrithm. This leaves Clearpool in a difficult position, squeezed between Maple’s broad integrations and Wildcat’s specialized pivoting.
Addition: YieldBasis (YB) About YieldBasis: YieldBasis is a liquidity protocol built on Curve infrastructure that introduces a “Zero-Impermanent Loss” automated market maker (AMM) for Bitcoin. It utilizes 2x leverage via crvUSD borrowing and automated rebalancing to allow LPs to track BTC price 1:1 while earning organic yields, effectively solving one of the largest pain points in BTC DeFi.
Growth Evidence:
Immediate Traction: Since its launch in Q4 2025, YieldBasis has demonstrated exceptional product-market fit, rapidly surpassing $130M TVL.
Revenue Generation: The protocol successfully activated its fee switch in late December 2025, validating its economic model and driving demand for the governance token.
Strategic Synergy & Ecosystem Impact:
Curve Infrastructure Enhancement: YieldBasis creates a highly symbiotic relationship with Curve Finance. By utilizing crvUSD for leverage, it directly enhances the stablecoin’s utility, deepens its liquidity, and drives borrowing adoption.
New Revenue Stream: This integration opens an additional revenue stream for the Curve ecosystem through increased borrowing fees and utilization.
Peg Stability: While the protocol’s rebalancing mechanism introduces volatility within small time windows, the design creates structural demand that supports the crvUSD peg over the longer term, contributing to the overall health of the ecosystem.
# DGI Index Update: Emergency Proposal to Remove RESOLV and Rebalance Portfolio
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1. Summary
This proposal outlines an emergency action to remove the RESOLV token from the DeFi Growth Index (DGI) and proportionately rebalance the resulting weight across the remaining assets in the basket. This action is a direct response to the recent exploit on the Resolv protocol and the subsequent cascading risks to RESOLV’s on-chain liquidity.
2. Background & Rationale
A core mandate of the DGI is to maintain exposure to high-growth DeFi protocols while actively monitoring and mitigating smart contract and liquidity risks.
Recently, the Resolv protocol suffered a security breach. Following this exploit:
USR Depeg: The protocol’s underlying asset, USR, is currently trading at a significant discount to its peg.
Liquidity Contagion: A thorough analysis of RESOLV’s on-chain liquidity profile reveals an outsized reliance on USR-paired pools.
Price Action Risk: Because the primary liquidity routes for the RESOLV token are deeply intertwined with a depegged and compromised asset, the RESOLV token is highly vulnerable to severe price depreciation and a liquidity crunch.
Retaining RESOLV in the DGI basket exposes the index to unacceptable systemic risk and potential unrecoverable drawdowns.
3. Proposed Action
To protect the integrity of the index and shield holders from further downside, the following steps will be executed via the Reserve Protocol:
Target Weight Adjustment: Reduce the target weight of RESOLV in the DGI basket from its current allocation to 0%.
Asset Liquidation: The Reserve protocol's rebalancing mechanisms will incrementally sell off the existing RESOLV inventory.
Pro-Rata Rebalancing: The capital preserved from the removal of RESOLV will be redistributed pro-rata among the remaining assets in the DGI basket, increasing their respective weightings to absorb the vacant allocation.
4. Impact & Risk Mitigation
Executing this proposal will immediately sever DGI’s exposure to the Resolv protocol's ongoing crisis. By relying on Reserve's native rebalancing auctions, we aim to exit the position with minimal slippage given the current liquidity constraints, while reinforcing the index's remaining high-conviction positions.
5. Next Steps
Upon approval of this proposal, the target weights will be updated on-chain, and the Reserve protocol will commence the rebalancing auctions to restructure the basket.
# [CORRECTED] DeFi Growth Index (DGI) Quarterly Rebalance – Removal of CPOOL & EUL and Addition of YB
[https://forum.reserve.org/t/rfc-defi-growth-index-dgi-quarterly-rebalance-removal-of-cpool-eul-and-addition-of-yb/1405](https://forum.reserve.org/t/rfc-defi-growth-index-dgi-quarterly-rebalance-removal-of-cpool-eul-and-addition-of-yb/1405)
This proposal is a corrected proposal addressing the failure to add YB as planned in the [previously submitted proposal](https://app.reserve.org/ethereum/index-dtf/0x9a1741e151233a82cf69209a2f1bc7442b1fb29c/governance/proposal/25776308802309217494226627615379803843172161248191456653654282530466350610298).
All other parts are the same. Please vote on this one and not the previous, incorrect one.
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**Overview**
As part of the scheduled quarterly review of the DeFi Growth Index (DGI), we present the proposed constituent adjustments for the Q1 2026 rebalance. This review ensures that DGI continues to track innovative, early-stage DeFi projects with sustainable growth potential, in line with the index’s stated objective and inclusion criteria.
Based on the quarterly review, we propose:
**Removal of Euler (EUL)** due to stagnation in market share and intense competition from next-gen lending protocols.
**Removal of Clearpool (CPOOL)** due to the underwhelming performance of the Ozean launch and aggressive moves by competitors in the institutional credit space.
**Addition of YieldBasis (YB)**, a novel BTC liquidity protocol that eliminates impermanent loss and demonstrates deep synergy with the Curve ecosystem.
**Removal: Euler (EUL) Rationale:**
Market Share Erosion: Euler’s growth has stagnated, with its market share shrinking throughout Q4 2025.
Competitive Lag: The protocol is being outpaced by competitors innovating rapidly in the lending space. Aave recently rolled out its umbrella model and v4 with expanding RWA markets; Morpho has successfully launched v2; and Fluid is capturing stable swap market share through its smart debt/collateral design.
Innovation Deficit: In this fast-moving environment, Euler currently lacks the distinct innovative elements required to reverse this downtrend.
**Removal: Clearpool (CPOOL) Rationale:**
Underwhelming Product Launch: The launch of Ozean, intended as the institutional liquidity layer for on-chain financing, has been somewhat underwhelming and failed to capture the expected market momentum.
Competitive Disadvantage: Competitors are executing more aggressive integration strategies. Maple Finance is actively expanding the reach of syrupUSDC and syrupUSDT by integrating them into new protocols like Midas and ecosystems like Plasma & Solana, effectively siphoning liquidity demand.
Market Positioning: Meanwhile, Wildcat is successfully pivoting to become a liquidity hub for on-chain hedge funds by working closely with on-chain risk curators such as Hyperrithm. This leaves Clearpool in a difficult position, squeezed between Maple’s broad integrations and Wildcat’s specialized pivoting.
**Addition: YieldBasis (YB**)
About YieldBasis: YieldBasis is a liquidity protocol built on Curve infrastructure that introduces a “Zero-Impermanent Loss” automated market maker (AMM) for Bitcoin. It utilizes 2x leverage via crvUSD borrowing and automated rebalancing to allow LPs to track BTC price 1:1 while earning organic yields, effectively solving one of the largest pain points in BTC DeFi.
Growth Evidence:
Immediate Traction: Since its launch in Q4 2025, YieldBasis has demonstrated exceptional product-market fit, rapidly surpassing $130M TVL.
Revenue Generation: The protocol successfully activated its fee switch in late December 2025, validating its economic model and driving demand for the governance token.
Strategic Synergy & Ecosystem Impact:
Curve Infrastructure Enhancement: YieldBasis creates a highly symbiotic relationship with Curve Finance. By utilizing crvUSD for leverage, it directly enhances the stablecoin’s utility, deepens its liquidity, and drives borrowing adoption.
New Revenue Stream: This integration opens an additional revenue stream for the Curve ecosystem through increased borrowing fees and utilization.
Peg Stability: While the protocol’s rebalancing mechanism introduces volatility within small time windows, the design creates structural demand that supports the crvUSD peg over the longer term, contributing to the overall health of the ecosystem.
# DeFi Growth Index (DGI) Quarterly Rebalance – Removal of CPOOL & EUL and Addition of YB
[https://forum.reserve.org/t/rfc-defi-growth-index-dgi-quarterly-rebalance-removal-of-cpool-eul-and-addition-of-yb/1405](https://forum.reserve.org/t/rfc-defi-growth-index-dgi-quarterly-rebalance-removal-of-cpool-eul-and-addition-of-yb/1405)
Overview
As part of the scheduled quarterly review of the DeFi Growth Index (DGI), we present the proposed constituent adjustments for the Q1 2026 rebalance. This review ensures that DGI continues to track innovative, early-stage DeFi projects with sustainable growth potential, in line with the index’s stated objective and inclusion criteria.
Based on the quarterly review, we propose:
Removal of Euler (EUL) due to stagnation in market share and intense competition from next-gen lending protocols.
Removal of Clearpool (CPOOL) due to the underwhelming performance of the Ozean launch and aggressive moves by competitors in the institutional credit space.
Addition of YieldBasis (YB), a novel BTC liquidity protocol that eliminates impermanent loss and demonstrates deep synergy with the Curve ecosystem.
Removal: Euler (EUL)
Rationale:
Market Share Erosion: Euler’s growth has stagnated, with its market share shrinking throughout Q4 2025.
Competitive Lag: The protocol is being outpaced by competitors innovating rapidly in the lending space. Aave recently rolled out its umbrella model and v4 with expanding RWA markets; Morpho has successfully launched v2; and Fluid is capturing stable swap market share through its smart debt/collateral design.
Innovation Deficit: In this fast-moving environment, Euler currently lacks the distinct innovative elements required to reverse this downtrend.
Removal: Clearpool (CPOOL)
Rationale:
Underwhelming Product Launch: The launch of Ozean, intended as the institutional liquidity layer for on-chain financing, has been somewhat underwhelming and failed to capture the expected market momentum.
Competitive Disadvantage: Competitors are executing more aggressive integration strategies. Maple Finance is actively expanding the reach of syrupUSDC and syrupUSDT by integrating them into new protocols like Midas and ecosystems like Plasma & Solana, effectively siphoning liquidity demand.
Market Positioning: Meanwhile, Wildcat is successfully pivoting to become a liquidity hub for on-chain hedge funds by working closely with on-chain risk curators such as Hyperrithm. This leaves Clearpool in a difficult position, squeezed between Maple’s broad integrations and Wildcat’s specialized pivoting.
Addition: YieldBasis (YB)
About YieldBasis:
YieldBasis is a liquidity protocol built on Curve infrastructure that introduces a “Zero-Impermanent Loss” automated market maker (AMM) for Bitcoin. It utilizes 2x leverage via crvUSD borrowing and automated rebalancing to allow LPs to track BTC price 1:1 while earning organic yields, effectively solving one of the largest pain points in BTC DeFi.
Growth Evidence:
Immediate Traction: Since its launch in Q4 2025, YieldBasis has demonstrated exceptional product-market fit, rapidly surpassing $130M TVL.
Revenue Generation: The protocol successfully activated its fee switch in late December 2025, validating its economic model and driving demand for the governance token.
Strategic Synergy & Ecosystem Impact:
Curve Infrastructure Enhancement: YieldBasis creates a highly symbiotic relationship with Curve Finance. By utilizing crvUSD for leverage, it directly enhances the stablecoin’s utility, deepens its liquidity, and drives borrowing adoption.
New Revenue Stream: This integration opens an additional revenue stream for the Curve ecosystem through increased borrowing fees and utilization.
Peg Stability: While the protocol’s rebalancing mechanism introduces volatility within small time windows, the design creates structural demand that supports the crvUSD peg over the longer term, contributing to the overall health of the ecosystem.
# DeFi Growth Index (DGI) Quarterly Rebalance – Removal of BAL, Addition of RESOLV, and Response to LQTY/CPOOL Addition Proposal
[https://forum.reserve.org/t/rfc-defi-growth-index-dgi-quarterly-rebalance-removal-of-bal-addition-of-resolv-and-response-to-lqty-cpool-addition-proposal/1237](https://forum.reserve.org/t/rfc-defi-growth-index-dgi-quarterly-rebalance-removal-of-bal-addition-of-resolv-and-response-to-lqty-cpool-addition-proposal/1237)
**Overview**
As part of the scheduled quarterly review of the DeFi Growth Index (DGI), we present the proposed constituent adjustments for the upcoming rebalance together with the regular market cap-based rebalance. The review ensures that DGI continues to track innovative, early-stage DeFi projects with sustainable growth potential, in line with the index’s stated objective and inclusion criteria.
Based on the quarterly review, we propose:
- Removal of Balancer (BAL) due to underperformance relative to peers.
- Addition of Resolv (RESOLV), a protocol introducing stablecoin yield tranching with demonstrated organic adoption.
In addition, we are addressing the recently raised community proposal suggesting [the inclusion of Liquity (LQTY) and Clearpool (CPOOL) ]("https://app.reserve.org/ethereum/index-dtf/0x9a1741e151233a82cf69209a2f1bc7442b1fb29c/governance/proposal/58388728351210059118715987727433735565200369864263555389096990084272722775261")in the DGI basket.
**Removal: Balancer (BAL)**
Rationale:
- Lack of Relative Growth – BAL has lagged peers in adoption, TVL, and fee generation.
- Unrealized Upgrade Impact – The v3 release, expected to revitalize adoption, has not delivered meaningful traction.
- Index Alignment – DGI’s mandate is to capture scalable and growth-oriented protocols. BAL no longer reflects this profile.
**Addition: Resolv (RESOLV)**
About RESOLV:
Resolv introduces tranche-based yield stablecoins, wstUSR and RLP, offering differentiated risk/return profiles. This expands stablecoin applications from lending and LPs into structured, capital-efficient yield strategies.
Growth Evidence:
Resolv has shown organic and sustainable TVL/user growth, driven by product-market fit rather than short-term incentives.
**Addition: Clearpool (CPOOL)**
About CPOOL:
Clearpool is a decentralized credit marketplace focused on institutional lending. It has expanded across chains and continues to grow steadily. Its Ozean, announced recently, aims to bring real-world assets (RWAs) onchain, opening access for DeFi users to institutional credit markets — an innovation highly aligned with DGI’s growth and diversification mandate.
Growth Evidence:
Clearpool has demonstrated organic adoption in both institutional and retail credit markets. The upcoming Ozean product shows strong potential to make RWAs more accessible and composable within DeFi.
**Not Added: Liquity (LQTY)**
We recommend not adding LQTY at this time.
Product-Market Fit Limitations:
Current market demand favors borrowing that enables looping on correlated pairs (e.g., LSTs/LRTs, stable-stable pairs). Liquity only allows borrowing its stablecoin BOLD against ETH collateral, which limits flexibility and competitiveness.
Fixed-Rate Borrowing Competition:
Liquity’s fixed-rate borrowing design is conceptually interesting, but emerging protocols such as Term Max and the upcoming Morpho v2 offer more attractive fixed-rate borrowing options with lower liquidation risk and broader collateral support.
Adoption Trajectory:
Liquity’s growth curve has been relatively flat compared to early-stage stablecoin projects such as Resolv, Resupply, Falcon, Reservoir, etc., all of which show stronger organic momentum.
Verdict: Liquity is a solid project but currently lacks the competitive edge and adoption dynamics that align with DGI’s growth mandate. We will continue to monitor its progress for future reviews.
Call for Feedback
We invite input from community members on the proposed basket adjustments. We would like to hear from you!
# Basket Constituent Maintenance: IPOR Deprecation, DRV Reallocation, and LIT Migration
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**Abstract**
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This proposal seeks to amend the DeFi Growth Index (DGI) portfolio by addressing three tokens: IPOR, DRV, and LIT. Specifically, it proposes to:
Remove IPOR, which has been deprecated, and add FUSN to the basket upon completion of its airdrop.
Remove DRV due to insufficient liquidity on Ethereum and facilitate its transfer to Base or Derive exchange for conversion to USDC, with proceeds reinvested into existing DGI constituents.
Complete the migration of LIT to BUNNI by swapping LIT for BUNNI on the Bunni exchange, with support from the Reserve team. These changes aim to maintain the DGI’s alignment with its objective of tracking high-growth DeFi projects while ensuring liquidity, and portfolio optimization.
**Rationale**
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The DGI is designed to hold tokens from early-stage DeFi projects with innovative mechanisms, established market demand, and strong growth potential. The following issues necessitate immediate action to uphold these criteria:
**IPOR Deprecation:** IPOR has been deprecated, and its replacement token, FUSN, will be airdropped based on a prior snapshot of IPOR holdings. Retaining IPOR in the DGI is no longer viable, and adding FUSN post-airdrop ensures continuity of exposure to the project’s ecosystem.
**DRV Liquidity Constraints:** DRV lacks sufficient liquidity on Ethereum, where DGI operates, violating the DGI’s requirement for tokens to be available on at least two major decentralized exchanges with adequate trading volume (minimum 7d trading volume of 10% of market cap). Removing DRV and converting its holdings to USDC on a supported chain (Base or Derive exchange) will allow reinvestment into liquid, compliant constituents.
**LIT Migration to BUNNI:** LIT has migrated to BUNNI, requiring a swap to maintain exposure to the project’s updated token. This migration aligns with DGI’s goal of holding tokens that reflect the latest developments in their respective protocols.
These changes are critical to mitigate risks such as liquidity constraints, deprecated assets, and misalignment with DGI’s inclusion criteria, thereby protecting holder value and optimizing portfolio performance.
**Proposed Actions and Specifications**
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**IPOR Removal and FUSN Addition**
Action
Remove IPOR from the DGI basket immediately, as it is deprecated. Add FUSN to the basket once the airdrop is complete and FUSN is listed on at least two major decentralized exchanges (e.g., Uniswap, Curve, or Balancer) on Ethereum.
Specifications
Verify the completion of the FUSN airdrop and ensure FUSN meets DGI inclusion criteria:
- Market capitalization between $10 million and $1 billion.
- Minimum 7d trading volume of 10% of market cap.
- Audited by recognized security professionals within the last 180 days, with critical/high-risk findings resolved.
- Not classified as a security by relevant regulatory authorities.
- Allocate the weight previously assigned to IPOR (pro-rata based on current holdings) to FUSN upon inclusion, subject to rebalancing during the next quarterly review (August 2025).
- Coordinate with the Reserve team to confirm airdrop logistics and FUSN’s on-chain availability.
**DRV Removal and Reinvestment**
Action
Remove DRV from the DGI basket due to insufficient liquidity on Ethereum. Transfer DRV holdings to either Base or Derive exchange, swap for USDC, move USDC back to Ethereum, and reinvest into existing DGI constituents.
Specifications
- Engage Reserve and Derive teams to facilitate the transfer of DRV to Base or Derive exchange, where liquidity is available.
- Execute the swap of DRV for USDC on the chosen exchange, ensuring minimal slippage and optimal pricing via on-chain Dutch auctions managed by the Reserve Protocol.
- Transfer USDC back to Ethereum and allocate proceeds proportionally to existing DGI constituents (e.g., MORPHO, FLUID, COW, etc.) based on their current weightings.
- Ensure all transactions are transparent, recorded on-chain, and audited for accuracy.
- Target completion of the swap and reinvestment within 30 days of proposal approval, pending team coordination.
**LIT to BUNNI Migration**
Action
Swap LIT for BUNNI on the Bunni exchange to complete the token migration, with support from the Reserve team.
Specifications
- Coordinate with the Reserve team to execute the swap of LIT for BUNNI on the Bunni exchange, ensuring the swap aligns with the migration terms (e.g., 1:1 or protocol-specified ratio).
- Verify that BUNNI meets DGI inclusion criteria (market cap, trading volume, audit status, regulatory compliance).
- Maintain the weight previously assigned to LIT for BUNNI, subject to adjustment during the next quarterly review.
Complete the swap within 30 days of proposal approval, pending Reserve team support and exchange availability.
**Timeline**
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- 2025 Jul 8: Proposal submitted to the Reserve Protocol governance forum..
- 2025 Jun 9 - 11: On-chain voting period.
- 2025 Jun 12: Proposal outcome executed.
- 2025 Aug - Sep: Next quarterly review to finalize FUSN inclusion and rebalance the portfolio.