• Proposal

  • OIP-94A: Amend Interim Ranged Stability Policy Levers

Summary:

Grant Policy Authority to:

  1. Continue deploying inverse bond markets

  2. Continue running inverse bond markets below and above backing

  3. Continue burning OHM acquired via inverse bonds

Background

OIP-94 gave OlympusDAO the authority to run an Inverse Bond program during periods when OHM’s market price trades above the liquid backing price per OHM, with the goal of moving towards the 120 day moving average (120d MA). OIP-94 specified a program lasting 90 days and ending on July 25, 2022. In accordance with its internal bonds framework, the bonds team has been providing additional capacity to inverse bonds to comply with OIP-94 for the past few months.

Due to the negative macro and crypto market conditions however, positive pressure exerted by inverse bonds hasn’t been sufficient to reach the 120d MA. This is by design. Our intention was always to provide enough support to encourage the market to move toward our 120d MA objective under neutral market conditions, and not to drain the treasury fighting a full-on bear market. What this means is that over the last few months inverse bonds have captured and re-directed sell pressure off the market below OHM’s backing price. Also, the treasury has been buying a lot of cheap OHM below liquid backing. Thus, the inverse bond program is both profitable and has increased backing per OHM for OHM holders over this period.

In theory, OlympusDAO still has ~2 more weeks to reach the 120d MA, but Ranged Stability is being finalized and won’t be ready by then. This proposal seeks to modify/amend OIP-94, to continue the inverse bond program (under current parameters, i.e., targeting the 120-day moving average) until the launch of Ranged Stability, which is currently being audited and finalized.

Motivation

OIP-94 has succeeded in profitably removing OHM from circulation, dampening downside OHM volatility during adverse market conditions, and proving the beneficial impact of Inverse Bond markets on the protocol. As this OIP concludes and we anticipate the launch of Ranged Stability, the best interest of the Olympus econOhmy remains to continue using its Treasury to conduct market operations that encourage healthy market behavior.

Implementation Details

  • A target to meet the 120-day moving average

  • Daily/weekly inverse bond capacity will continue to be determined by the amount of DAI required to meet the 120-day moving average target

  • OHM acquired from inverse bonds will be burned

  • This program will end when Ranged Stability is live

Note that the specific parameters will be monitored regularly by Policy and will change based on market conditions

Proposal

Authorize the Policy team to:

  • Continue running inverse bonds above liquid backing

  • Burn remaining OHM after removing liquidity

The poll will be open through Wednesday, July 20th. After this discussion period, voting will go live on Snapshot on Thursday, July 21st. The proposal will be implemented if passed after the voting period concludes.

Should the Inverse Bond program continue until Ranged Stability launches?

This poll has ended.

I'm in favor of this amendment.
It's working as intended unfortunately the entirety of all markets are in one hell of a rut right now. Only so much everyone can do. I applaud the DAO and Policy teams for making the best out of the crappy situation.

Policy has executed incredibly well and IB has performed. The only open question for me given a lack of hard timelines for when range bound stability will launch is how much money from the treasury we ultimately think we're going to burn. Should there be a cap given an unbounded timeline?

I agree with Shpadoink and have no issue giving this authority to policy. That said, I think qualifying the burn and creating a cap before another amendment is needed would be prudent. Policy can even recommend what kind of capital budget this would require knowing when they feel Range Bound might be ready. Just fiscally conservative to not having something that is greenfield.

Otherwise, full steam ahead.

    I voted yes and please do as much as possible to increase my market capitalization percentage ownership !!!

    We are in favor. OIP-94 did exactly as it set out to do. Only suggestion would be to have some understanding of the capacity.

    Relwyn The amount OlympusDAO is willing to spend on inverse bonds is really dependent on the market. The goal for this OIP is not to fight the market, but to try to reach the moving average goal. In a neutral market capacity would be relatively low and consistent. However, in a depressed market where OHM's discount to its backing value is large then Olympus is more willing to capture that discount as its profitable.

      16 days later
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