OIP-80: Tender Offer Framework
Olympus has little role to play in the success or failure of our fork's beyond the moral support of our community members. However, we often share community members with our forks and we observe their progress with interest. Recently, adverse market conditions and other factors such as a general decline in interest in rebasing protocols, have caused some projects to trade below backing (i.e., below the market value of a project’s treasury on a per token basis).
We sympathize with these projects that may be struggling to regain market confidence. In certain circumstances, we believe it will be possible to execute transactions that help alleviate or eliminate the struggles of these forks. Specifically, where a fork’s token is trading below backing, there may be an opportunity for Olympus to make a tender offer at a price per token (likely denominated in gOHM) that is higher than the current market price. This endeavor is beneficial for both Olympus and the target protocol.
If such a transaction were approved, the fork’s treasury would merge with Olympus and the fork’s community and dev team would be welcomed with open arms into the Olympus community. The advisability of such a deal would be very fact-specific, depending on factors like the size and quality of the fork’s treasury assets, as well as the profile of its community. This proposal presents a framework for Olympus to pursue such tender offers, in each case with Olympus community approval.
For Olympus forks that may be struggling, there is no place like hOHM.
At the beginning of 2022, Olympus laid out a plan to build a strong ecosystem around our decentralized reserve currency called the Olympus12 Action Plan. In accordance with the strategic vision laid out in Olympus12, we believe Olympus must sit at the center of a strong and growing ecosystem in which OHM is widely used as trusted backing and a unit of account. In this sense, projects and ideas that are based on Olympus but struggle to convince the market of their independent viability, and therefore trade below backing, may still have a valuable role to play in the Olympus ecosystem.
We also sympathize with the dev teams of struggling protocols, who confront the unenvious choice of dealing with existential threats while a project is still in its relative infancy, or else abandoning the project and facing accusations of “rugging” the community.
In appropriate circumstances, our framework would offer a third option: if a fork’s community would like Olympus to consider making a tender offer, and such an offer would further our Olympus12 vision, then we would propose a deal.
The Olympus team seeks community authorization to make tender offer proposals consistent with the following process:
The Olympus community expresses its general interest in exploring tender offers by approving this proposal (potentially together with other marketing efforts).
We have reason to believe such a proposal would have strong support within the target’s community, typically because a member of the target’s community has asked us to consider a tender offer. Requests could be made via a dedicated channel in the Olympus Discord.
We determine it would be profitable for Olympus (and otherwise advisable) to make a proposal, consistent with the template below.
Any proposal made would be subject to prior approval by the Olympus community, as well as other conditions clearly set forth in the proposal document.
Tender Offer Template
The table below reflects Olympus’ current thinking about what the material terms of a tender offer would likely look like. Specific proposals will vary from this template, and all tender offer proposals will require Olympus community approval.
This poll will run for 5 days before heading to snapshot, please read and submit comments or critiques.