• Proposal
  • OIP-26: Move OHM-FRAX pool to Uniswap v3

Reads like a smart move, particularly on adding liquidity to arbitrum. New market to take share in. The efficiency in fees as stated is also material to suggest the approval. Well done team.

bubbidubb Your point about smart contracts is well-taken. I'll be interested to hear the response.

Uni v3's mechanism is a fantastic innovation that allows market participants to achieve much higher levels of capital efficiency. I'm fully aligned with the proposal seeing as we're looking to achieve just that; thicker liquidity, lower slippage, and higher revenue from trading fees per unit of capital are some of the consequences of higher capital efficiency of the protocol owned liquidity.

The apparent downside is that the RFV goes down, though the proportion of the reduction doesn't convey the amount of risk that is taken with this sort of decision -- if that could be called 'risk' at all. The trading ranges are adjustable, and that goes both ways! 🙂

Really looking forward to the new opportunities the Treasury can take which are both safe and effective.

    bubbidubb We are waiting for FRAX to move so that there are more FRAX pairs users can move through, not just OHM-FRAX. That way we get maximum utility out of the pool.

    I appreciate the proposal and the idea to make our liquidity more capital efficient. I would just think that fragmenting our liquidity by only moving 50% to Arbitrum doesn't make much sense, because the other half will remain useless. So I would rather vote to move everything we have to V3 or Trident and if it makes sense have all of it on Arbitrum.

    vira The apparent downside is that the RFV goes down

    I imagine that in the longer term, if we needed to, instead of managing the Uniswap V3 position itself and holding the hard-to-value position NFT, we could make use of third party Uniswap V3 management partners where treasury ends up with an easier to value, fungible token, there's already a bunch of these starting to pop up (Visor, Charm, Sorbet, and I'm sure at least a few others).

    • vira replied to this.

      Safisynai

      Yup! Lots of opportunities down the line, but we have to be sure we've properly evaluated the stacking protocol risks when implementing 3rd party strategies.

      So you checked projects like visor finance and it wasn't worth the risk?

      I notice that the is a OHM-ETH pool on visor with:
      TVL USD

      $622,386.50

        bubbidubb Well in this case, we'd be earning less fees, but we'd also get "free" (in terms of us not paying out incentives) liquidity. I think that's a good deal for us, as the payment to those liquidity providers could be considered a rev-share scheme.

        However, keep in mind that there already is a pool on Uni v3 not controlled by us earning fees as you can see in the proposal, so what you're saying is already happening, just without us there.

        This is a fantastic idea. Using V3, we can also layer several ranges of liquidity. For example considerable liquidity (something like ?%) from 25 to 1500, and then extra liquidity from more recent lows to highs 150 to 1000 (25%).

        Barring major events, I don't see Ohm trading below 160 anytime soon.

        I think this could be a good idea, but I'd like to understand the impacts of ending the "OHM-FRAX bond". I feel like ending the OHM-FRAX bond and migrating 50% of the OHM-FRAX pool to Arbitrum should be separate OIPs and can't be bundled together so people can vote with on single things rather than a bundle of things.

          bubbidubb I agree with this.

          I think Arbitrum is super important for investors like me that can't afford the ETH gas like myself, but I also want to be sure that Arbitrum isn't putting liquidity at risk since it's relatively new.

          I don't know enough about this, but before migrating too much liquidity into Arbitrum I think we should make sure the Arbitrum contracts and even the Olympus web app/source code get audited to make sure there is less risk.

          SIDE NOTE: I strongly recommend we get OHM on defi insurance platforms: https://forum.olympusdao.finance/d/93-defi-insurance-offerings-for-ohm because even with audits and great coders there's always risk. Insurance doesn't stop hacks, but it protects funds which is the next best thing.

          If folks are opposed to using one of those platforms we can also use something similar to AAVE's safety module which locks up staked funds to protect user funds in the event of an emergency https://docs.aave.com/aavenomics/safety-module.

          i-feel-so-al-ohm They are separate options in the vote, so you don't have to vote for both. Olympus on Arbitrum already has a separate proposal where the pros and cons are discussed.

            Graz likely one step at a time - this is the passive management option to get us going. I think the team will continue to look for active management strategies!

            shadow Ah I see but I thought you also wanted to “end OHM-FRAX bonds due to the complexity for users and inability of our Treasury to take in v3 LP tokens”

            Which is why I was confused

              i-feel-so-al-ohm OHM-FRAX bond capacity is low anyway. If we were to move to v3, we'd be better off ending them than looking for complex solutions that allow users to bond v3 positions. So if the community wants to go to v3, the OHM-FRAX bonds should be ended, no need to separate the two options.

                shadow Got it that makes sense. I suppose as long it doesn't have a big effect it should be fine as you mentioned! Thanks for your replies!

                Small detail, how do we handle fees ? Do we have the multisig people reinvesting them periodically ?

                I like the idea of moving to V3, not so much the idea of moving it to Arbitrum. Maybe we should see how the ETH-OHM pool we're going to do works out first.