The discussion revolves around a proposal by MatthewGraham, Metfanmike, and Mringz from 3SE Holdings to onboard DeFi Pulse Index (DPI) as collateral on the Aave ARC market¹. DPI, a leading DeFi-themed indices product, is backed by strong on-chain liquidity and institutional investors. The proposal aims to provide direct exposure to DeFi without the need to list multiple tokens, thereby making DeFi more accessible to traditional investors via the KYC approved Aave ARC platform¹.

DPI, a basket of 13 popular DeFi tokens managed by Index Coop, is seen as an excellent fit for collateral in the Aave ecosystem due to its significant borrow demand, low volatility, efficient sector representation, and liquidity via primary and secondary markets¹. The proposal also highlights that IndexCoop DAO is voting on a liquidity mining campaign to attract TVL to the Arc Market and expose institutions to the power of token incentives¹.

The discussion concludes with the specification that DPI should be whitelisted for use on the Aave Arc Market¹. MatthewGraham also announced that Index Coop is considering offering INDEX incentives to those who lend DPI on Aave Arc Markets, and shared links to the ongoing discussion and snapshot vote for this proposal^2,3. This proposal, if accepted, could potentially increase the accessibility and adoption of DeFi among traditional investors.