- Edited
Summary
FIAT DAO is transitioning away from gOHM-denominated liquidity on mainnet Sushiswap to OHM-denominated liquidity on mainnet Uniswap v3. In consultation with the Treasury and Partnerships teams of the Olympus DAO, we are proposing that we be approved as an OHMDEBTOR at a maximum loan-to-value ratio of 75% so as to maximize the capital efficiency of our current OHM holdings.
Motivation
FIAT DAO launched liquidity mining rewards for its governance token, FDT, on November 15th with an emphasis on a gOHM pairing. Later, on December 15th, FIAT DAO initiated an Olympus Pro program to accumulate FDT-gOHM liquidity; this program has attracted nearly half a million worth of LP tokens to date. Lastly, FIAT DAO just cemented a formal partnership with OlympusDAO via OIP-73 which included a token swap for 1% of FDT supply at a 50% discount. It is now our intent to migrate liquidity away from Sushiswap gOHM to Uniswap v3 OHM, as gOHM liquidity routing on Sushiswap is not currently available.
One way of doing this would be to simply a) pair discretionary budget FDT against the partnership OHM, and b) unwrap and migrate the Sushiswap liquidity owned by the DAO to Uniswap v3. This, however, would result in the DAO’s relative stake in the OlympusDAO to be eroded over time, as well as preclude it from participating in community governance. While optimal for FDT’s market participants, it ultimately undermines the very reason we were intent on aligning ourselves with the ecosystem in the first place.
As such, we are keen on finding a solution that preserves the DAO’s OHM purchasing power, retains its voting privileges, and unlocks liquidity for users holding FDT.
Proposal
In line with Redacted Cartel’s OIP-69, and in consultation with the Olympus Treasury and Partnerships teams, we propose to be approved as an OHMDEBTOR (the incurDebt() function) - which would allow for FIAT DAO to collateralize its treasury sOHM while still provisioning naked OHM liquidity against FDT.
We propose the following borrowing parameters:
An absolute borrowing limit of 80,000 OHM
A 75% LTV limit
This line of credit would essentially be utilized intermittently. Once, to instantiate OHM for Uni v3 liquidity against all of FIAT DAO’s sOHM holdings, and then again only as existing debt gets paid down.
In conjunction with this program, FIAT DAO would transition its Olympus Pro program away from LP tokens, instead seeking to accumulate OHM outright to pay down the debt. We view this as being more productive than acquiring FDT/OHM tokens as one OHM worth of debt paid off effectively unlocks 1XX% OHM-worth of liquidity.
We are working with the Olympus DAO contributors to deploy the incurred debtOHM to a smart contract that would ensure no borrowed OHM would ever be able to be sold or staked.
Polling Period
The temperature check polling process begins now and will be live for at least 72 hours - this will then be sent to a Snapshot vote which will be live for at least 72 hours.
Poll
For: FIAT DAO to receive approval for the incurDebt() function.
Against: FIAT DAO not eligible for incurDebt() functionality.
