Summary: We can launch bonds using DAI instead of SLP as payment to increase supply production efficiency.

Background: We launched liquidity bonds two weeks ago with the intent of accumulating and locking SLP tokens. Since then, we have accumulated over half the pool valued at nearly $7m. While we should not replace LP bonds by any means, we should think about supplementing them with DAI bonds to increase the rate of supply production.

Abstract: Due to the way the treasury has to value LP tokens (using the Risk-Free Value equation), they are quite inefficient at producing supply. The treasury treats every $1 of liquidity as 3c for the purposes of backing tokens. With DAI bonds, every $1 given will be treated as $1. This means we can double the rate of supply production by diverting a mere 3% of bond demand. DAI bonds will also offer an alternative to smaller bonders or those who do not want to spend gas adding liquidity.

Motivation: Increase the rate of supply production, build up bond market with a second (more constrained) option. LP and DAI bonds can and should be played against each other.

Additional Context:
Medium post on DAI bonds: https://olympusdao.medium.com/dai-bonds-a-more-effective-sales-mechanism-c9a57586f1f7
What is SalesLite: A contract we have been running for the past week which sells 4.2 OHM into the pool each epoch and mints new OHM (~ 10k per day) for stakers and the DAO. The downside of this approach is it is direct sell pressure, and we could remove it since DAI bonds have the same function with less market impact.

For: Add DAI bonds and remove SalesLite
For: Add DAI bonds and keep SalesLite
Against: Do not add DAI bonds

Voting link: http://vote.olympusdao.finance/

    Zeus could you please explain for non-IT people and/or noobies what SalesLite is and what would be the effect of removing or keeping it in the protocol while adding DAI bonds? I am not sure which one of these two options results in what. Thanks in advance 🙂

        Well explained ser , im prefering dai bonds
        With ongoing sales lite, at least for a fixed period

        Is there any analysis on the negative impact it would have on LP bonds? Liquidity have been growing at a nice pace so far and my understanding is that DAI Bonds will probably slow down that growth in favor of supply growth correct? Just trying to understand the tradeoffs here.
        I would also be in favor of keeping the sales lite as I don't see it harmful for the protocol in any way.

        dai bonds are cool, let see if we can tweak the discount to push more liquidity > dai?

        DAI bonds are gonna be huge for building reserves and efficiency

        Agree with @TheCommenter , I am for DAI bond, but maybe we could gradually phase out SalesLite instead of removing it at once. Once the DAO is comfortable with the profit DAI bond is generating, then it makes sense to remove SalesLite completely.

        Agree with adding Dai bonds and phasing out sales lite

        Wouldn't removing SalesLite completely defeat the purpose of upward volatility protection? What are the pros and cons of removing saleslite for DAI bonds? I don't see how DAI bonds would be a substitue if, say, a person lends ETH against DAI -> buy bonds -> earns more OHM in the future. Unless ohmies (-3, -3) -> buy DAI bonds

          0xSov Yea I agree, I don't really see the advantage of removing sales lite. IMO the protocol should use the high premium to its advantage.

            If we want to sell more, we can sell more. It doesn't have to happen through salesLite though. Let's say bonds are taking in $20k per day and salesLite is bringing in $10k per day. We could run both, or we could just lower the BCV by 33% to add an extra $10k in capacity to bondai.

            The only difference I see is:
            With bondai, the bonder might use their own dai or sell into the pool (-3, -3) to buy the bond. There's some probability between 0-100% that the dai comes from the pool.
            With salesLite, that probability is 100%. It's a guarantee because it is literally selling into the pool.

            Phase out will certainly be a vote option though. Though i think bond-only is better, having both isn't necessarily a bad thing.

            3 months later
            kschan changed the title to OIP-2: Launch DAI bonds .
            kschan locked the discussion .
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