[RFC] DeFi Growth Index (DGI) Quarterly Rebalance – Removal of BAL, Addition of RESOLV, and Response to LQTY/CPOOL Addition Proposal

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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 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:

  1. Removal of Balancer (BAL) due to underperformance relative to peers.

  2. 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) 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.

Next Steps & Timeline

  • Aug 27 - Aug 31 2025: Gather community and delegate feedback on:

    1. Removal of BAL.

    2. Addition of RESOLV.

    3. Addition of CPOOL.

    4. Exclusion of LQTY in this rebalance.

  • Aug 31 2025: Confirm the final weightings based on the market caps and initiate vote for the proposed rebalancing.

Call for Feedback

We invite input from community members on the proposed basket adjustments. We would like to hear from you!

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Thank you for this wonderful proposal and welcome to the Forums!!

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