Summary
This proposal is to initiate the integration of Tracer DAO product suite (e.g. Perpetual Pools V2) with the Olympus DAO UI to allow Ohmies to get exposure to other assets using OHM, gOHM and other assets related to the EconOMHy as collateral. Tracer’s Perpetual Pools product allows for anyone to go long or short underlying asset or group of assets (aka an index) using any ERC20 token as collateral and any Oracle as the underlying market without subjecting them to liquidation or margin debt.
Motivation
We believe that velocity of currency is vital to a healthy economy and the ability to use currency in a broad range of economic activities is critical to broad adoption of a currency. Tracer is looking to help Ohmies build a stronger EconOHMy through the integration of Perpetual Pools V2 and other infrastructure developed by Tracer to help support these goals.
Leverage can be a double edge sword particularly when liquidations drive forced selling and negatively impact other holders of the assets that are being liquidated. Perpetual Pools aims to mitigate this risk by providing the ability to enter into leveraged positions without being subject to liquidations by using a Power Leverage function (more information on Tracer Perpetual Pools can be found here).
Proposal
Tracer would develop an Olympus specific UI and hand over the code to Olympus to maintain the UI as subdomain within the Olympus Ecosystem. This UI will be built on top of Tracer’s Smart Contracts to allow Ohmies to get exposure to other assets outside the Olympus Ecosystem without selling OHM, gOHM or other native assets deployed by Olympus DAO. If successful, this will reduce sell pressure on the OHM and gOHM tokens as the leveraged markets will be settled in native tokens, and the holder will be simply taking a directional bet of other assets against another holder of the native token. The goal is to create more utility value for the OHM and gOHM token while reducing volatility in its price action with day to day and long term market movement.
With minimal barriers, OHM & gOHM holders will be able to mint and burn Perpetual Pool tokens for existing markets, or for new markets created by the user that are settled in gOHM and OHM. Using Tracer’s Perpetual Pools, leveraged markets can be generated for anything with an oracle price feed (e.g. Chainlink).
The tokens for these markets will as well be fungible and can be traded across DEXes, like Balancer. The new Perpetual Pools V2 tokens are intended for long term holding and have a drastically reduced exposure to volatility decay - link to article on Vol Decay. (simulations suggest 5% per annum in volatility decay in 3x markets (note: the higher the leverage the more decay realized) which will be mitigated by minting fees that are distributed to Pool tokens holders reducing decay even further - more information here).
Additionally, as Tracer develops other infrastructure to help support markets (e.g. vaults), we will work to provide access to these tools to Olympus DAO. If this proposal is successful, it is also proposed that “Powered by Tracer DAO” or something to the same effect is published on the UI alongside co-marketing efforts in line with other major partnerships with other protocols.
Additional Considerations
A portion of the fees (10%) generated by trading activity in the Olympus Perpetual Pool markets will flow into the Olympus DAO Treasury Contract. This is a standard amount baked into the smart contracts.
Polling Period
The polling process begins now and will end at 12:00 UTC on 08/04/2022. After this, a Scattershot vote will be put up at or around 13:00 UTC on 08/04/2022.
