Very interesting proposal and generally supportive. Two questions;

is there a minimum discount to treasury asset value that we would except? For example, they are trading at a 25% discount to NAV so we offer a 15% discount for the acquisition? But we set a minimum acceptable discount of 10% to treasury value.

second is, I'm confused by the Dev grants. What are the parameters? Wouldn't the Devs of these projects be effectively receiving support from us as they likely have large positions in the underly projects? I suppose could be valid if pressed against their forward efforts, but would benefit from being fleshed out moreso

    Why in the world would we buy distressed assets? That is what this proposal is. Stay the course and use our treasury wisely.

      mysselium33

      Yeah this makes perfect sense, just misunderstood the mechanism by which OHM takes the treasury assets. I am completely in agreement, if Olympus already has the treasury on hand we should be lenient with stragglers and there is little to no added downside therefore the change I proposed is unnecessary.

      Thanks

      Temeculadawg

      No I think you misunderstand what the proposal is saying. Using Wonderland as an example (though I highly doubt they are one of the ones we'd buy):

      The distressed asset is wMEMO, but the treasury of wonderland is made up of say AVAX, MIM, & wMEMO LPs. it may be that a loss of confidence in the team causes wMEMO to trade below the value of the AVAX & MIM in the treasury. The way I understand the proposal Olympus would be buying the MIM & AVAX in the treasury, and offer gOHM in return, just distributed to wMEMO holders

      I dont think the goal would be to end up with wMEMO in the treasury, which is the distressed asset. Just the AVAX and MIM which are unrelated to Wonderland's troubles

      musashison

      Thanks for your questions.

      The question of pricing these deals will be tricky. On the one hand, we want to offer to the target's holders a fair price that they find attractive. On the other hand, we don't just want to buy a bunch of assets at par. The price we would offer needs to not only consider the treasury market value per floating token, but also the sell pressure that would result on gOHM if we're paying in gOHM, and the costs (and potentially benefits) we would face in accommodating that sell pressure. All that to say, I don't think we know with precision what the correct % would be, and reasonable people might disagree.

      The dev grants are an interesting point as well. We haven't fleshed out the parameters generically because dev teams are quite different from one another & we think it's more appropriate to look at this on a case-by-case basis. You're right that typically the devs would be able to participate in the TO and benefit in that way. Since many of the best devs work on projects they're passionate about, we also want to recognize that and create a very clear path for them to continue working on the vision and being compensated for that. We can flesh out the terms for that in specific offers (maybe there's vesting for example), and we recognize that the "acquihire" concept is unlikely to work in an anon setting, but we think that recognizing the efforts of the dev team will make it more likely that they will want to work with us going forward, and therefore more likely that the deal with succeed.

      Temeculadawg

      Thanks for your comment.

      You misunderstood the proposal. The real "acquisition" isn't the target's tokens; rather, we acquire the target's tokens in order to gain control of its treasury, which would need to be composed of quality assets (stables, eth, other blue chips, etc) for this to be interesting. The targets treasury would be merged into Olympus' treasury.

      I hope that makes it more clear. Thanks.

      I think this is a great idea! It allows for instantaneous treasury growth while giving developers and investors an option to explore should their projects struggle to improve price action (assuming their aim is to do so).

      There's a lot of scattered funds out there across the forks. Let's capture some of it and bring it hOHMe.

      What considerations have been made around the market front-running our acquisitions?
      It feels like the moment we discuss a named protocol, the market will react bringing the price up closer to parity with backing. Assuming this occurs, it may cause smaller market participants that hold the token to exit and leave us with a handful of whales that will undoubtedly and likely immediately dump the gOHM they get.

        dr00

        Thanks for your comment. In short, you're right: I think we can say with confidence that this trade will get arbed as soon as we announce. Our offer price won't change based on these arbs, though. It's not clear (1) where exactly the token will trade on announcement relative to our offer price, since there is still quite a bit of execution risk between announcement and closing and (2) that this would necessarily shake out smaller holders. Those are fair hypotheses; we'll see how it goes.

        Either way, we can also be pretty sure that many participants will dump. We would only do a deal where we're confident we can absorb the sell pressure and the net effect of the transaction will be positive for Olympus even after considering that.

        Why would we want to ever acquire a failing project? I've seen 0 forks that offer compelling roadmaps s.t. their treasury is worth acquiring at any premium.

        In my mind, Olympus is not the IMF (International Monetary Fund), it's the US treasury. If other forks have failed to create a compelling roadmap for their protocols on certain chains, then Olympus should simply launch on those chains when the time is right, not bail them out (just as the US would not solo bail out a foreign country, but the IMF would).

        Olympus as it stands needs to focus on building long-term entrenchment with real defi protocols, not copycat forks, so that it can build sustainable, non-circular sources of revenue a la Olympus Pro.

        M&A always seems appealing, but its a classic failure mode of companies that are blindly chasing growth without understanding the fundamental supply & demand dynamics of their product. This is gone into in-depth in Good Strategy / Bad Strategy by Rummelt, but you can read the relevant quotes here https://mentalpivot.com/book-notes-good-strategy-bad-strategy-by-richard-p-rumelt/

        “The problem with engineering growth by acquisition is that when you buy a company…you usually pay too much.”

        “Healthy growth is not engineered. It is the outcome of growing demand for special capabilities or of expanded or extended capabilities. It is the outcome of a firm having superior products and skills. It is the reward for successful innovation, cleverness, efficiency, and creativity.”

        From where will the gOhm come to pay to the xtoken holders? This transaction can be thought of as analogues to BONDING, ohm treasury acquires assets(the assets in the treasury of the distressed protocol) and pays out Ohm to the bonder(xtoken holders). Ohm is received by xtoken holders in form of gOhm. Every xtoken holders gets gOhm proportional to this %share of distressed treasury.

        cryptogoliath

        I agree. I think we should have a framework for evaluating the projects beforehand to help the community determine if they should even be considered for an offer.

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