Summary
Deploy the new system of Permissionless Olympus Pro contracts as an independent entity rebranded to Bond Protocol. By releasing Olympus Pro as its own protocol, OlympusDAO can focus on making OHM the decentralized reserve currency for Web3 and benefit from shipping valuable products for the econOHMy. Bond Protocol will remain tightly aligned with OlympusDAO and include the same Olympus Pro contributing team.
Background
Since launching Olympus Pro, we were able to find product-market fit and kick off a wave of liquidity-as-a-service competitors. We worked with over 50 protocols on 7 chains to help them bond nearly $150M of assets. This year we have been working with our partners, listening to their feedback, and developing the next iteration of Olympus Pro to resolve common pain points. The new set of contracts are:
Permissionless - anyone can create a bond market
Tokenized - bond purchasers receive a token that represents their position. This will allow for the creation of secondary markets and additional composability in DeFi
Extensible - unified contract architecture allows for new types of bond markets to be plugged into the system
Efficient - fewer contract deployments per partner resulting in substantial reduction in gas costs
Flexible - handles a wide range of token types and relative price differences
While incorporating these improvements, it became clear that the new set of contracts could be deployed as its own protocol and become essential Web3 infrastructure.
Motivation
In order for Olympus Pro to scale and meet the demands of DeFi, it must be a credibly neutral platform laser-focused on bonds-as-a-service. There is an increasing divergence between the development efforts of both a reserve currency and a dedicated bond platform. We believe that an independent bond protocol will attract additional development talent, funding, and provide an avenue to accelerate features that enhance Olympus’ bond capabilities.
Assets acquired via Olympus Pro are an important, but relatively small, percentage of overall Olympus holdings and revenue streams. For example, every $1 in OP revenue is currently being priced based on the market’s perception of OHM. By deploying OP as its own protocol, we believe that it will provide more value to Olympus than keeping it in-house and allow Olympus Pro to achieve a true appraisal of revenue streams and growth potential. This will also clarify business development domains and allow Olympus to increase focus on core products (ex: Ranged Stability, Incur Debt).
^ Note that the above chart does not reflect cross-chain Olympus Pro revenue or revenue denominated in several RFV/Strategic assets (ex: DAI, wETH)
Proposal
If approved, the Permissionless OP contracts will be deployed as an independent entity and rebranded to Bond Protocol. Functionally this involves deploying the contracts with a different multisig authority, to be managed with key Olympus members as signers. Off-chain, an independent Bond Protocol entity will be formed and scoped for additional development resources.
Olympus will use the newly formed Bond Protocol contracts for its bonds. This set of contracts are effectively Bonds v3, which have been developed with Olympus in mind as the largest customer. Importantly, there will be no fees charged for Olympus bonds deployed from Bond Protocol.
The initial deployment of Bond Protocol will include two types of bond markets:
Fixed-term bonds tokenized as ERC1155 NFTs (most similar to previous bonds)
Fixed-expiry bonds tokenized as ERC20, same expiry date makes bonds fungible
How does OlympusDAO benefit?
OlympusDAO has been undertaking an effort to focus on its core mission - to make OHM the decentralized reserve currency for Web3. By releasing Olympus Pro as its own protocol with its own mission (bonds-as-a-service), Olympus further focuses on its core product while demonstrating a track record of shipping valuable products for the econOHMy.
Olympus has made a large investment in developing Olympus Pro, while OP has accrued substantial revenues to the Olympus Treasury. With OP revenue growth slowing in recent months due to market conditions, releasing Bond Protocol will provide alternative avenues of growth and conserve runway for core OlympusDAO development. Olympus will still benefit from Bond Protocol’s success and maintain substantial influence in its development through ownership and governance rights in Bond Protocol.
Closing Thoughts
I expect that many DAO members and Ohmies will have mixed feelings about this proposal. Please keep in mind that this is the starting point for a community conversation. We will do our best to address concerns and be as transparent as possible.
The impact that Olympus can make by deploying Bond Protocol as essential infrastructure for protocols is enormous. We are confident that this is the best path forward to drive value to OlympusDAO and the broader econOHMy.