The $INDEX Economy

How $INDEX coordinates the index economy across liquidity, agents, staking, and futarchy.

$INDEX is the coordination layer of PolyBaskets. It connects the people who create indexes, operate agents, supply liquidity, build strategies, and help decide how the protocol evolves.

The token is designed around participation rather than passive ownership. Users hold, stake, or lock $INDEX to unlock specific actions across the platform, while rewards follow measurable contributions to the network.

One economy, three connected layers

Thematic indexes

The product layer. Related prediction markets are combined into weighted baskets that users can create, trade, redeem, and manage as one thesis.

Market liquidity

The capital layer. USDC deposited into PolyBaskets liquidity vaults supports order books, index creation and redemption, hedging, and rebalancing across the underlying markets.

$INDEX

The coordination layer. $INDEX provides access, accountability, incentives, and governance across agents, indexes, strategies, and liquidity programs.

Each layer strengthens the others. Better indexes attract more trading. Greater activity creates more fees and market-making opportunities. Deeper liquidity improves execution, while $INDEX coordinates where incentives, agents, and treasury resources should be deployed next.

The loop the economics are built around. Usage generates activity and fees, $INDEX routes rewards back to participants, and better indexes bring more usage.

What $INDEX unlocks

$INDEX is intended to be used throughout the product rather than exist as a token disconnected from it.

Activate autonomous agents

Lock $INDEX to access agents that research markets, execute strategies, monitor risk, and rebalance indexes continuously. Higher participation tiers can unlock additional execution capacity, data, and automation.

Create accountable indexes

Creators and agents stake $INDEX as a quality bond when launching public indexes. This creates economic accountability and helps protect the index catalog from spam, abandonment, and manipulation.

Access strategies

Use $INDEX to access specialized agents, research feeds, index methodologies, and execution strategies created across the PolyBaskets network.

Coordinate liquidity

Lockers help determine which indexes receive liquidity incentives, treasury support, visibility, and agent capacity. Allocation can reward useful liquidity instead of idle capital.

Earn by contributing

Creators, agents, strategists, and liquidity providers can earn rewards when their work produces measurable value through volume, liquidity, execution quality, or sustained product usage.

Participate in futarchy

$INDEX connects participants to the markets that guide treasury allocations, incentive programs, integrations, fee policies, and major protocol decisions.

Liquidity for the index economy

PolyBaskets uses two separate liquidity systems with different purposes:

$INDEX token liquidity

An external $INDEX/USDC market allows users to acquire or sell $INDEX and supports price discovery around the Futardio ecosystem.

PolyBaskets market liquidity

Native USDC vaults deploy productive capital across indexes and their underlying prediction markets. This is the liquidity that supports execution, hedging, and index-backed yield.

Liquidity providers deposit USDC, while autonomous agents allocate that capital across selected markets and strategies.

Alongside the core vault, curated vaults will let selected operators and strategists run focused mandates on the same rails: a specific theme, market category, or strategy style, with its own published parameters.

The same liquidity is also designed to reach beyond PolyBaskets itself. Integrated prediction-market platforms plug into PolyBaskets market liquidity, routing their order flow through the shared vaults. Depth built on one platform serves every platform connected to it, and the activity they bring flows back to the same liquidity providers.

The vault is designed to support four core functions:

Deeper markets. Agents place two-sided orders across supported prediction markets, improving depth and reducing spreads.
Index creation and redemption. Liquidity helps users enter or exit a complete thematic index without creating excessive price impact.
Hedging and rebalancing. Agents manage inventory and hedge unintended exposure across related markets as index weights and probabilities change.
Index-backed yield. Trading spreads, index fees, maker rebates, and market incentives flow back into the vault.

The market liquidity vault: LPs deposit USDC, agents deploy it across the markets, and returns flow from real trading activity plus $INDEX incentives.

Target return model

The planned vault return has two distinct components:

Return component	Modeled target	Expected source
Base market yield	6–10% APY	Trading spreads, index fees, maker rebates, and market-making activity
`$INDEX` incentives	+4–8% APR	Temporary, governance-approved incentive programs
Estimated combined return	10–18% annualized	Market activity plus variable `$INDEX` rewards

The interface will display these components separately so users can distinguish market-generated yield from token incentives.

For example:

Base market yield: 7.8% APY $INDEX incentives: +5.0% APR Estimated combined return: 12.8%

Where the 10–18% comes from

The target is modeled on the same engine that already produced 4.8M transactions on mainnet: real order flow, spreads, and index fees, with governance-approved $INDEX incentives on top. Returns move with market activity, and market making carries real risk. That is exactly why every number is reported live after launch, so providers verify performance instead of trusting a promise.

After launch, PolyBaskets replaces modeled estimates with transparent performance data: realized 7-day and 30-day APY, capital utilization, fees earned, incentive rewards, and vault drawdown, all visible in the interface.

Locking and staking $INDEX

Locking $INDEX is how users make a longer-term commitment to the network. It does not automatically generate a fixed APY.

Instead, locked $INDEX is designed to provide access to benefits connected to active participation:

Agent access. Unlock execution credits, gas sponsorship, higher limits, and advanced automation.
Creator accountability. Bond new indexes, agents, and public strategies to their operators.
Liquidity incentives. Qualify for temporary reward boosts when supplying USDC to approved PolyBaskets vaults.
Product access. Receive reduced fees or access to selected strategies, data, and early index launches.
Protocol coordination. Participate in futarchy markets and help guide liquidity, treasury, and incentive allocations.

Any future rewards paid directly to $INDEX lockers should be funded through a transparent, governance-approved allocation. Market-generated yield and temporary token incentives will always be reported separately.

Rewarding useful participation

Rewards are designed to follow measurable contributions rather than idle activity.

Index creators

Earn when their indexes attract sustained usage, maintain reliable methodologies, and generate meaningful activity.

Agent operators

Earn for useful execution, uptime, risk management, liquidity quality, and strategy performance under published rules.

Liquidity providers

Earn variable returns from spreads, fees, rebates, and approved incentive programs while accepting the risks of market making.

Strategy builders

Earn when users subscribe to, license, or execute their agents, methodologies, research, and data.

Future Agent Arena seasons can extend this model by rewarding agents for verified activity and performance rather than transaction count alone.

Governed through futarchy

Futarchy allows markets to help guide how PolyBaskets allocates capital and attention.

Participants can express expectations around proposals such as:

Which indexes should receive liquidity incentives
How much capital the treasury should deploy into liquidity vaults
Which agents, integrations, or ecosystem programs should be funded
How protocol fees should be allocated
Whether rewards should support liquidity, execution, development, or growth

This keeps $INDEX connected to real protocol decisions. The objective is not governance for its own sake, but better allocation of resources across the index economy.

Proposals become markets. Participants price the outcomes, the higher-value outcome executes, and measured results sharpen the next decision.

PolyBaskets as infrastructure

The index layer is designed to become shared infrastructure for platforms that want to offer conviction-based prediction products without rebuilding index creation, automation, liquidity coordination, and settlement from scratch.

Custom products, shared rails

Integrated platforms can define themes for their audiences while using PolyBaskets for index construction, weighting, automation, and settlement.

Shared liquidity access

Integrations can route through coordinated PolyBaskets vaults, allowing liquidity to compound across products instead of being isolated inside every new application.

$INDEX operator bonds

Operators can be required to stake $INDEX when launching or managing public indexes, creating accountability for the products they operate.

Measurable incentives

Integrations can earn incentives based on the activity, liquidity, and execution quality they contribute to the network.

Other platforms plug conviction-based indexes into their own products. PolyBaskets provides the rails; $INDEX keeps every operator aligned.

Over time, PolyBaskets can expand from weighted baskets into rolling indexes and perpetual-style exposure for selected liquid themes. Users would be able to express long or short conviction across an entire thesis rather than rely on a single expiry-bound market.

The principle

The people who create, trade, operate, fund, and improve the index layer should be able to participate in its growth.

$INDEX connects those participants through real product utility. As more indexes are created and used, the network gains more activity, deeper liquidity, stronger agents, and better information for deciding what should be built next.

Put your $INDEX to work

Stake $INDEX → Receive sINDEX Earn a target 12–15% APY, distributed through $INDEX staking rewards.

Deploy sINDEX into Credit Indexes Access a target 18–20% total APY, supported by diversified credit-index strategies operating through PolyBaskets.

sINDEX represents the user's staked position and keeps it usable across the PolyBaskets economy. Users can hold sINDEX for staking rewards or deploy it into Credit Index strategies for a higher target return.