Q2 Indigo Labs Newsletter

UI v2, development update, and what’s on the horizon

8 min readMay 18, 2023


Welcome to the inaugural edition of the Indigo Labs newsletter! This will be the first in a new series of regular updates aimed at keeping the Indigo community informed about the latest developments, achievements and future plans in the Indigo ecosystem. As we mark six successful months since Protocol launch, we’d like to extend an invitation to the community to join the Indigo Labs team and members of the Protocol Working Group for an Indigo Insights Community Call on Thursday, May 25th, 5 PM UTC. This call marks the return of our community calls and will be the first since the launch of the Protocol. Join us on Discord: https://discord.gg/gVqDRNg7VH to be part of the action!

Indigo Protocol Growth

As the Protocol approaches the six-month milestone since launch, we’d like to take a moment to reflect on the incredible growth and achievements that have defined Indigo’s journey so far. From its humble beginnings in November 2022, with a total value locked (TVL) of 6.57M USD (20.59M ADA), Indigo Protocol has experienced consistent expansion, reaching an impressive 27.81M USD (76.07M ADA) in TVL as of May 16th, 2023. This remarkable progress has propelled Indigo to the #11 spot in CDP protocols ranked by TVL. (DefiLlama)

Throughout this period, Cardano stablecoin $iUSD has held its position as the largest iAsset by TVL, growing consistently from an initial 5.77M USD to an impressive 18.26M USD as of May 16th. Similarly, $iBTC began at 2.11M USD and has climbed to a TVL of 5.16M USD. $iETH has also made significant strides since its whitelisting on January 12th, reaching a TVL of 4.79M USD.

Stability Pool APRs are also worthy of review. As of our April 1st — May 1st report the APRs are 36.77% for iUSD, 46.68% for iBTC, and 49.75% for iETH. Furthermore, $INDY Governance Stakers have seen an average APR of 29.58% through the combination of Governance Staking and real yield from INDY Protocol Fee Sharing through the month of April. As of Epoch 412, 812,569 ADA and 79,134 INDY have been distributed to INDY Governance Stakers since launch.

Development Updates

The Indigo Labs team continues to make strides in enhancing the Indigo Protocol as directed by the Indigo DAO in their vote to have the Indigo Foundation retain Indigo Labs as the Service Provider. Below is a comprehensive review of the significant achievements in Q1-Q2 and a sneak peek into the exciting developments to come.

Featured Update: Indigo Protocol Web-App v2

Indigo Labs is diligently working on the development of version 2 of the web-app, which brings a brighter, more vibrant user interface and an enhanced user experience. This new iteration will also provide users with more robust tooling options to evaluate their positions and iAssets, ensuring a more comprehensive display of information. See the improved CDPs page, Stability Pools page, and separate dedicated INDY Staking and Governance pages as a sneak peek of coming improvements. While development is progressing at a rapid pace, a release date for web-app v2 will be determined in the coming weeks. Stay tuned for more exciting updates on this front!

Stability Pools
New Dedicated INDY Staking Page
New Dedicated Governance Page

Q2 Progress Report

  1. Launch of ADA/INDY Incentivized Liquidity Pools on Minswap
    The DAO Proposal by the Indigo Protocol Working Group (PWG) to use expired INDY rewards to incentivize ADA/INDY Liquidity on Minswap passed on May 6th. INDY incentives for the ADA/INDY pair on Minswap will begin May 21st, which also marks the official end of the Minswap INDY LBE.
  2. Rewards Page Backend Revamp
    Recognizing that user experience is central to protocol adoption, Indigo Labs has overhauled the rewards page backend. In collaboration with service provider SundaeSwap Labs, we successfully improved error handling and drastically reduced the number of issues users encountered while redeeming rewards. Further optimizations and improvements will continue to be made over time.
  3. Liquidation History Page
    One of the most requested features from the Indigo community has been the ability to see the liquidation history of CDPs. To support this request, Indigo Labs introduced a Liquidation History section on the CDPs page of the web-app.
  4. Security Improvements to Endpoint Devices
    The development team, in tandem with the security team and advisors, recently completed an extensive survey of all endpoint devices. The collaborative effort resulted in significantly hardening the off-chain infrastructure, including the oracle infrastructure of the Indigo Protocol. Security training for Indigo Labs members further bolstered both company and personal account safety.
  5. NuFi Wallet Integration
    Adding to the suite of user-friendly features, the team integrated the NuFi Wallet with the Indigo Web Application, offering users an additional option for seamless connectivity.

On the Horizon: Upcoming Developments

  1. Rewards Vesting Contract Deployment
    The team has completed the development and audit of the rewards vesting smart contract. Users can expect deployment soon after a pending dry-run of the vesting smart contract on both preview and mainnet.
  2. Transaction Chaining for Liquidation Bot
    In a significant enhancement to protocol throughput, the liquidation bot can now chain liquidations using the Cardano mempool. The team is finalizing the upgraded version of the bot and will soon share the new throughput statistics.
  3. Oracle Integrations
    The Labs team is diligently working with oracle service providers to integrate their decentralized feeds into the Indigo protocol. The Labs team feels that this will significantly strengthen the protocol’s data feeds and decentralization while allowing for the expansion of the Indigo Protocol iAsset suite with its upcoming on-chain proposal of $iEUR. Additional decentralized oracles will be presented to the DAO in the near future.
  4. Automating Rewards
    In an effort to streamline the rewards distribution system and processes, the team is collaborating with the SundaeSwap Labs to automate rewards submissions every epoch, reducing the dependency on manual inputs and enhancing efficiency.
  5. Indigo Protocol Working Groups
    The Labs plans to submit a proposal to the Indigo DAO for the creation of the Indigo Protocol Technical Working Group (TWG). The TWG will serve as a technical steering committee for the DAO, and as a technical advisory group to Indigo Labs for all Indigo Protocol technical improvements and enhancements.
    The Labs will also present a proposal for the creation of the Indigo Protocol Outreach Group (POG) to assist in marketing and outreach of the Indigo Ecosystem. (Please join the conversations on discord if you are interested in participating in either the TWG or POG).
  6. Open Sourcing Indigo Protocol
    In the spirit of true decentralization, Indigo Labs has made the Indigo Protocol smart contracts open-sourced. Indigo Labs applied a Business Source License (BSL), which prohibits commercial forks of the code for two years. Labs will soon provide guidelines on how to contribute to the open-source project to facilitate community developer contributions, enabling developers to build their own supporting tools for the protocol.
  7. Bug Bounty Program
    Alongside open-sourcing the Indigo Protocol smart contract code, Indigo Labs has initiated a bug bounty program for Indigo Protocol’s smart contracts which is ongoing and has been running since April 17th, 2023.

Things to Come

  1. Transaction Chaining on Web-App
    Building on the success of transaction chaining in the liquidation bot, the Labs team plans to extend this feature to the web application, potentially eliminating any transaction contention issues for users.
  2. Indigo Protocol Upgrade to Indigo Protocol v2
    The team is gearing up design and development efforts for Indigo Protocol v2, evaluating optimizations and considering a shift from Plutus TX to Aiken or Helios for greater on-chain capabilities.
  3. iAsset Redemption Margin Ratio (RMR)
    Indigo Labs is currently in the research and development phase for an iAsset Redemption Margin Ratio (RMR) to make iAssets redeemable which will provide a level of downwards depeg protection, complementing the anti-upwards depeg mechanism within Indigo Protocol (official information to come).

The upcoming months and the remainder of 2023 promise to be eventful as Indigo Labs continues to push the boundaries of synthetic assets in the DeFi space.

DAO Governance Update

The Indigo DAO has become increasingly active in supporting the Protocol after its launch. DAO members have cast over 5 million $INDY votes, setting governance participation records for the Cardano ecosystem. In this Governance section, we cover a TL;DR of the four most recent and significant on-chain votes.

Proposal #16: Poll for DAO to ratify the 5 nominees to the Protocol Advisor Working Group:

The approved Protocol Working Group (PWG) analyzes and suggests improvements to Indigo Protocol’s reward structures, fees, economic logic, and safeguards. By collaborating on these critical aspects, the PWG aims to enhance system solvency, security, and overall performance, strengthening Indigo’s position in Cardano’s DeFi ecosystem.

Proposal #17: Poll to Retain Indigo Labs to Provide Services to the Indigo Protocol:

With the launch of the Protocol, the DAO assumed control, and in Proposal 17 the DAO directed the Foundation to retain the Labs team to do essential work as authorized by the DAO. The Services Schedule between the Foundation and Labs was finalized on April 28.

Proposal #18: Using Expired INDY Rewards:

This proposal, the first made by the PWG, approved the redistribution of unclaimed and expired $INDY rewards to Minswap’s ADA/INDY pool. The change was made to attract new $INDY liquidity providers after the expiration of the Liquidity Bootstrap Event (LBE) on May 21st, thereby offering an alternative way to earn INDY rewards and incentivize deeper INDY liquidity.

Proposal #19: Two Proposed Changes to Rewards: (1) Replace LP Token Staking Rewards with DEX Yield Farm Rewards; and (2) Remove Volatility Factor from Rewards Formula:

This proposal involved two changes to the Indigo Protocol rewards structure. The Labs team consulted with the Indigo Protocol Working Group on these suggested changes. The first suggestion was to replace the current LP Staking rewards feature with DEX yield farming support ($INDY rewards to DEX users delivered on the DEX along with other DEX rewards). The second change is in the Stability Pool rewards formula by removing the Volatility Factor (which uses the past 365 days of an iAsset’s price to increase rewards for SP providers of higher volatility iAssets). The Volatility Factor will be removed from the Stability Pool rewards formula, with a net result of increased rewards for the iUSD Stability Pool.


As Labs concludes its first official newsletter, we are filled with gratitude for the shared journey we’ve embarked upon. From the steady growth of Indigo Protocol TVL and the successful execution of critical DAO proposals to the growing community that has rallied around Indigo Protocol, we are humbled by what has been accomplished together. Core to Indigo Protocol are principles of decentralization, transparency and community governance — values that will continue to guide the Indigo ecosystem as the Labs, Protocol, Foundation, and DAO forge ahead together. With numerous promising developments on the horizon, the future of Indigo Protocol is bright. Everyone on the Indigo Labs team looks forward to sharing this exciting journey with the community. Stay tuned, and thank you for being part of the Indigo Protocol community!

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Indigo is a decentralized synthetic asset issuance protocol built on Cardano