Summary
Pilot deposit of no more than $500,000 DAI each into Vendor Finance and MYSO Finance Clearing House facilities pending several pre-conditions:
Vendor Finance will deploy their system to mainnet & provide a code review with OlympusDAO engineering teams
MYSO Finance will deploy their system to mainnet & provide a code review with OlympusDAO engineering teams
Cooler Loans is out of scope of this governance proposal. We will await a follow-up directly from Zeus regarding the audit before moving forward with a proposal.
Motivation
Per Zeus:
Lending has historically been a sore spot for Olympus. Rari Fuse stands out as the glaring example — Ohmies were plagued with unreasonably high interest rates and expensive & restrictive liquidation proceedings. This is especially nonsensical in the current environment, where OHM trades at/near/below backing and offers significantly more liquidity relative to supply than other, more lent to tokens like ETH, CRV, and others. Even now, we see little to no available liquidity on the two primary options (Vesta and Fraxlend), and high interest rates on Fraxlend. We can do better.
The Clearing House facility is a novel method for our treasury to deploy capital in an efficient way. The two groups below propose different approaches to similar problems:
https://forum.olympusdao.finance/d/1821-rfc-clearing-house-partnership-with-vendor-finance
https://forum.olympusdao.finance/d/1905-rfc-clearing-house-partnership-with-myso-finance
Per Vendor:
We have been working with UMAMI Finance to polish this concept and we are familiar with many edge-cases that are not immediately obvious. Umami DAO has been lending with Vendor out of their treasury and has made a consistent 40% APR. Currently they are lending $100k and taking a measured approach to lending. So far they have been satisfied with the service and we greatly value them as our partner. Please see their treasury report to learn more: https://blog.umami.finance/umami-finance-treasury-update-december-2022/
Per MYSO:
We’ve added a script to backtest various pool parameterizations, which is open source and can be found here: https://github.com/mysofinance/notebooks/blob/main/olympus-dao-myso_v_1_1-backtest/olympus-dao-myso_v_1_1-simulation.ipynb For the above mentioned initial pool parameterization, the pool would’ve returned a RoI of 7.8% for the backtesting period from 2022-03-01 to 2023-01-16. The backtest was run with similar assumptions to the ones found in the previous mentioned alternative proposals. The MYSO Finance team is happy to provide additonal backtests on demand.
Proposal
Pilot deposit of no more than $500,000 DAI each into Vendor Finance and MYSO Finance Clearing House facilities pending several pre-conditions:
Vendor Finance will provide:
- Mainnet deployment
- Code review with OlympusDAO engineering
MYSO Finance will provide:
Mainnet deployment
Code review with OlympusDAO engineering
Polling Period
Poll will begin now and end in 5 days.
Poll
Approve $500k pilot deposit into each protocol
Approve $500k to Vendor Finance (mainnet)
Approve $500k to MYSO Finance
Do not approve