• Proposal
  • OIP-87: BeraChain Investment + Strategic Partnership

The purpose of OIP-87 is to formalize Olympus participating in the seed round of BeraChain, as well as align as strategic partners with the BeraChain Foundation. The BeraChain team is raising $10m USD at a $50m fully diluted valuation. We propose that Olympus deploys $500k of treasury assets to invest in BeraChain. This allocation  would be 1% of the genesis token supply. Another 1% will be given to Olympus from the BeraChain strategic partnerships fund to bring Olympus' total ownership to 2% of the network.

This would be Olympus' largest early-stage allocation to a seed venture to date.

Background

What is BeraChain?

BeraChain is a fully EVM equivalent & IBC connected layer one blockchain that implements a novel "Proof of Liquidity" Consensus mechanism. PoLC aims to combat the shortcomings of traditional Proof of Stake validated blockchains by systemically ensuring the creation of liquidity as a core primitive required for block production.

Key Features of BeraChain:

  • Tri-Token Model: BeraChain follows a Tri-Token model consisting of fee token, governance token, and native fractional algorithmic stablecoin

  • Proof of Liquidity Consensus: Validator consensus power is calculated via the depth of liquidity pools within the native decentralized exchange. We have partnered with CrocSwap to assist in the development. The DEX is tied into the consensus mechanism, allowing liquidity "stakers" to earn block rewards. The consensus engine is based on a heavily modified version of Tendermint and utilizes the Cosmos SDK as the application layer

  • Full EVM Compatibility: Existing Ethereum smart contracts can be deployed without modification

  • Full IBC Enablement: Protocols can enable IBC transfers for their ERC20 tokens, allowing permissionless ERC20 bridging to over 30 chains, such as the Cosmos Hub and Terra

  • Built-in Synapse Integration: Protocols can bridge their tokens to 10+ EVM blockchains with minimal engineering effort; BeraChain handles everything

  • Interblock Computation: Protocols can execute autonomous tasks (keeper transactions) without external invocation. Reduces physical hardware requirements for DAOs and facilitates centralization aspects of running periodic tasks

  • Liquidity Provisioning: Governance token voting power can be used to direct systemically created liquidity as part of the block rewards and token bonding process. Protocols can utilize this feature to secure permanent, locked liquidity for their protocol without dilution due to bonding

Motivation

To provide an opportunity for Olympus to participate in BeraChain seed round and form a strategic partnership.

Proposal

Proposed Terms Seed Round Participation Olympus is to  deploy $500k in OHM distributed to the BeraChain Foundation in 5 installments, paid out at the first of each month beginning April 1st, 2022, and concluding on August 1st, 2022. In exchange, Olympus will receive the market equivalent of $500k (1% of the initial token supply) in the native fee token during the Token Generation Event (TGE). These tokens are subject to a three-year vesting period, with an unlock cliff at six months. Vesting of tokens begins at the signing of the genesis block.

Strategic Partnerships

The BeraChain Foundation will distribute additional fee tokens to the market equivalent value of $500k (1%) to Olympus to participate in the network as a strategic partner. These tokens are subject to the same vesting schedule listed above. In exchange for this allotment, our team and Olympus have agreed to commitments including but not limited to:

From Olympus DAO:

  • Creation of an Olympus Treasury on BeraChain for storing "Cosmos" native assets, with the initial focus on Berachain native fee token, Berachain stablecoin, and UST - subject to required Olympus Treasury team risk assessment, recommendation of asset allocations and treasury allocation proposal (TAP). In the longer term, consideration of expansion other Cosmos assets such as ATOM or LUNA

  • A deployment of Olympus Pro on BeraChain, with native Berachain protocols to act as launch partners

  • Marketing and promotion assistance

  • Continue to collaborate and explore further opportunities to integrate and work together

From BeraChain:

  • Deployment of the aforementioned Olympus Treasury at the following vanity address:

  • 0x3300000000000000000000000000000000000000

  • Both the investment and strategic partnership tokens can be allocated directly to this address

  • Bridging support via the Synapse Protocol and IBC for gOHM + other cross-chain support as needed for Olympus v3

BeraChain x Olympus Odyssey

  • BeraChain will continue efforts in helping Olympus Odyssey cross-chain engineering efforts, including but not limited to smart contract + cross-chain relayer architecture/design

  • Odyssey will utilize BeraChain as the "main hub" for storage, ERC721, ERC1155, and rewards routing

Polling Period

The temperature check process begins now and will run for at least 72 hours. A Snapshot vote will subsequently be initiated and open for at least 72 hours.

Should Olympus approve the seed participation & partnership?

This poll has ended.

See a few no votes. Cross checked with request for comment and did not see any questions raised or discussion take place that could produce some interesting discourse.

What's more concerning is @kleb and @tex are dao contributors. Care to produce some talking points or reservations? I think it's only fair for everyone involved in said proposal, the bera chain team seems keen to engage and would be +EV for the broader ohmie community also🙏 (Not to single anyone out also curious what reservations you have @FluctusLux)

Cheers, Kit

    Kition my reservations are:

    • Building blockchains is hard. Most fail to attract significant volume and users. Novel consensus mechanisms are interesting but higher risk. My preference is to let the market decide who the winners are and for Olympus to commit capital and resources higher up the tech stack.

    • 500K is a substantial investment at this time particularly given we are essentially investing in an idea and a team.

      I am a contributor in the incubator team. I raised my thoughts in internal conversations. The actual assessment of this proposal and interactions with the berachain team as been managed by the partnerships team in the DAO. I did not feel the need to raise my reservations publicly, as I feel like I have been heard within the DAO and though I am still not personally convinced, I do have faith in the diligence of my fellow contributors. Its up to the community to now decide.

      kleb

      Thanks for voicing your reservations in a respectful and succinct manner ser. They're reasonable, and imo the solution to most is a function of time.

      Your first point is true and it's one where we've tried to be especially proactive in our assembly of a syndicate of funds, angels, DAOs and supporters that specialize in driving volume and users to novel projects. The AMA highlights some of the folks on our cap table who have helped to grow similar ecosystems in the past, and part of our motivation to include Ohm in the fundraise (apart from giving back to the community) is to lean on the DAO's talents in growing new projects and directing attention from smart folks like the Ohmies.

      Ultimately however, there are no guaranteed wins otherwise venture capital in this space wouldn't exist, or this would be a 9 figure round that the DAO would not be seeing. I see your opinion re: allowing the market to decide, but Olympus has participated in many a risky bet / incubation in the past imo and I don't see how this is substantially different.

      I also agree that $500k is not a trivial amount. We've worked with the partnership team to be as accommodating as possible around terms. As such, the investment will be in gOHM, so we will not be draining stables from RFV or anything of the sort, and is metered over 5 months as a sign of good faith, which is the only exception that we've made for participants in this round. I agree, we're an idea and a team with a partially built product for a few more weeks, and ultimately our work will have to speak for itself on the Testnet etc if we want to win. I'm glad that you're willing to trust the diligence of the rest of the internal team, and I look forward to seeing what the community thinks.

      Kition going to echo kleb's sentiment on having reservations that I didn't feel were worth expressing in the RFC, where more than half of the comments don't really contribute to any kind of discussion.

      I do want to acknowledge that the terms of the investment are generous and I'm not overly concerned with the valuation. Additionally, I think the idea is interesting and the team seems to be solid. So what are my reservations?

      My biggest concern is around the current state of the DAO's holdings. For example, I would have been much more comfortable with this investment late last year. But the DAO's OHM holdings are currently worth $40M, which have to be balanced against ongoing operations, liquidity needs, DAO swaps, etc. I'm concerned that the timing is not appropriate for "the largest early-stage allocation to a seed venture to date."

      Additionally, I worry about the price of OHM and functionally adding $500k in sell pressure at this point in time. This was the context when I asked (in the AMA chat) what the team's plans are for the gOHM investment and whether some mutual vesting could be considered. I don't think we're doing a service to token holders to ignore current price action.

      Finally, I'm a bit disappointed that OHM isn't being integrated in some foundational way. I accept the team's justification that it's not wise to tie "network security to an asset whose parameters we have little to no control over with an already unevenly distributed supply." But I don't see how this helps Olympus or the utility of OHM beyond a potentially profitable early-stage investment. This was a missed opportunity imo and would have been a no-brainer if OHM was one of the tokens.

        kleb LOL what I hate how daos set up and try to act like they are nobility or on some significant higher level

        and it is clear to see that from this "500K is a substantial investment at this time particularly given we are essentially investing in an idea and a team." like why are you forgetting where you came from???? HOW THIS ALL STARTED! A idea to make a reserve currency a idea that a small group not even a team created and memed into this reality where ur pompous ass can even say 500k is a substantial amount

        tex

        Hey Tex

        Appreciate the acknowledgement regarding the terms of the deal / valuation / team etc.

        I can't speak much to the DAO's holdings, though I see where you're coming from. Imo it's a matter of whether the community believes in us and what we're trying to build, and I suppose the snapshot will be the ultimate test of the such.

        Regarding the price of OHM and sell pressure, while we've been quite open about having the investment carried out in instalments of gOHM over 5 mos (kind of a soft vest?) we also have little control over PA / sentiment apart from hopefully being able to drive Cosmos ecosystem DeFi enthusiasts to Ohm through the deployment on BeraChain.

        In terms of OHM's integration into the ecosystem, we're open to any and all suggestions and would love to encourage whatever crossovers are mutually beneficial - but as mentioned, we aren't going to entertain it as a fee token given security and distribution controls. As mentioned, OHM as collateral in the CDP and OHM-HONEY as a default liquidity routing pool through BGT feel like productive starts in this direction. Would love to hear other ideas provided that they don't take away from other core aspects of the BeraChain ecosystem. Fwiw, in the future we would expect that the OHM-HONEY pair would become part of the wrapped BGT LP composition and a core part of network security.

          SmokeyTheBera yeah exactly, not much to be done given market sentiment and current state of our holdings. That's also a valid point I overlooked about 5 installments being a kind of soft vest. I'm just the concernooor

          Appreciate the constructive discussion ser and looking forward to working together on crossovers 🙏

          Fantastic discourse, appreciate everyone's input!

          I know it's a bit late for this as the vote is out on the Snapshot.
          I second @tex 's concerns, and regardless of the current state of OHM markets, I think it's productive to entertain a scenario where Olympus DAO is comfortable with the size of the allocation vs. total DAO funds -- my concern is surrounding OHM not being used in a 'foundational way' as Tex put it.
          As I see it, the funds set aside, for occasions such as this one, should not be concerned with the EV for Olympus Treasury, such that it's a trade-off between short term sell pressure from Berachain in exchange for long term ROI on BeraChain tokens -- rather, grants and incubator exist to help the community iterate on the Olympus Ecohmnomy.

          I'm sure the proposal is inspired by good intentions, but I believe that what Olympus needs is more of "OHM being integrated in a foundational/meaningful way" and less of "Olympus Treasury will net a % ROI". If 'owning 2% of the supply' is a message between the lines that OHM can be integrated in a meaningful way, I think this is something that should've been explored a lot more.

          I am a PoS node operator and have been involved in the Cosmos ecosystem for a long time . I think building and maintaining a blockchain is not an easy task, can I learn more about your team's technical reserves?

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