- it was wOHM for meme and linguistic purposes (wsOHM kinda hard to say cleanly) but yeah that adds a level of confusion that isn't worth it. wOHM = wsOHM but we should definitely call it wsOHM
- Agree on last point, but what do you think of blacklist for pools? My only real concern with transferrability is a pool opening with the staked token that just provides a constant drag on price because some LP is greedy and wants staking rewards plus trading fees from everyone needing to arb the pool back together with OHM.
OIP-6: Wrapped OHM and Improved Staking
One thing I want to point out for the people that are concerned about liquidations introducing more volatility to OHM: The single largest day of liquidations in $ on Defi lending platforms was on 02/22/21, which had about $129m in liquidations, vs. a TVL in lending protocols of 8.973b, meaning about 1.40% of the TVL in lending protocols was liquidated. Lets say the Fuse pool is able to capture half of the sOHM that is staked. Given our current marketcap of $132m and that 90% of supply is staked, we end up with about $60m in wOHM as collateral in the Fuse pool. Using the 1.40% figure from 02/22/21, this would equal about $840k of wOHM being liquidated, or about .06% of current supply.
However, I think this scenario is very unlikely for the following reasons:
- The collateral threshold that is being discussed has been in the 20-30% range, which would mean that OHM price would have to drop by 70-80% to trigger a liquidation for someone who borrowed the max amount of DAI from the pool.
- Given the high collateral threshold, if price is dropping, those who borrowed against their wOHM in the pool should have enough time to manage their positions before being liquidated, I dont foresee that kind of drop happening without everyone being aware that they need to add more collateral.
- wOHM should be increasing in value as time goes on due to staking rewards, therefore lowering the ratio of borrowed DAI to wOHM collateral and decreasing the likelihood of a liquidation event.
Additionally, I don't think at our current market cap a 840k sell off would really matter that much in the long term and we would recover.
Some caveats to the above numbers:
- This is pretty rough back of the napkin math, and is just to illustrate a scenario where liquidations could happen and what those numbers might look like at current MC.
- Data for Defi lending/liquidations was taken from Debank, you can play with the numbers here: Debank Lending TVL
Some great points and scenarios posed by all. I've gone back and forth all day, but you've swayed my vote over to the camp 'for, keep sOHM'. Just submitted my vote.
Cheers OHMies!
- Edited
Wrapped, Staked OHM will be a necessary transitional step for OHM as a currency. It should help Olympus transition from high yield driven demand to stable and abundant collaboration driven demand. I see wsOHM as the key to getting OHM in the door with most protocols.
However, I think the conservative voices are right. We should wait. This is a great idea, but it's time is most likely after V2 launches and OHM has greater liquidity and a larger market cap. Further exposure to the rest of the market when Olympus is still relatively small and large market corrections are likely seems like the wrong move.
My high level thoughts on how this plays out over the next 2 - 5 years:
- Degens flock to sOHM yields
- Protocols grows and more features are added as it becomes harder to push around.
- sOHM yields begin a very slow, gradual adjustment downwards.
- wsOHM enters the fray, driving degens to look for ways to earn further yield on top of their sOHM. This spurs on protocol collaboration and is the first use case for OHM outside of OHM that makes sense.
- sOHM yield continue its gradual downwards trend and OHM sees signs of consistent stability
- wsOHM is now used in many other protocols. sOHM yields are entering low enough territory that other protocol yields begin to compete. OHM starts to see use cases as a relatively stable currency.
- OHM collaborations and use cases continue to increase as stability continues to improve, even through bear markets
- sOHM yields finally begin to range 2-15% and is now viewed like a savings account. wsOHM enables easily moving your "savings account" around DeFi to earn further yield. OHM is now the most stable, multi asset backed algo currency in DeFi. Most in crypto chart against OHM instead of USD. Other protocols offer crazy incentives to attract Ohmie's savings accounts.
Somebody in the Discord called me Captain No-FUSE (s/o G_MON3Y). While hilarious, it is untrue. I've had more than my say on this issue so however the vote goes, I'll support what the community decides. But if I have to be Captain Cassandra so be it.
The fundamental issue here is not FUSE or even wOhm. The issue is the vision of Olympus. What are we? Zeus has been an amazing leader but I feel that the vision needs to be better articulated and not scattered in bits and pieces during random ZAD sessions and months-old Medium posts. It's not that Zeus knows best (although I think he does) but without that clear vision, everyone will push Olympus in the direction that they want to go and hence we have this divide.
I believe that the heart of Olympus is (3,3). This meme perfectly encapsulates what actually separates Ohm from other hyperinflationary shitcoins. Game Theory and community spirit is what binds us, not the 100K APY and not autocompounding. (3,3) MUST remain the dominant strategy which means HODLers receive the best RISK-ADJUSTED gains. Anything that could undermine (3,3) needs to be scrutinized.
The thoughtful Ohmies makes various arguments about how (3,3) won't change. However their very words belie that very thesis.
"Let's tax wrapping" - A tax separates those who can pay the tax and those who can't afford it; the Privileged from the Plebs. Progressive income tax, Wealth tax, Carbon tax. Need I go on?
"Normal Ohmies don't need to wOhm. It's only for Pros" - Dividing the community into Pro(3,3) and SD(3,3) is a good thing? How is this not splitting (3,3) community? What do you tell new Ohmies who come into the Discord? If you're a Pro you do this. If you're a Pleb, you do that. Let's start selling Pro(3,3) hats in the merchandise store. It'll be a smash hit.
"We can mitigate risk by playing with CF ratios and liquidation levers and anyway liquidations should be embraced" - Translation: SD (3,3) should know their place and sit tight and watch the Pro (3,3) brag about their yuuge gainz during bull cycles (aka Genius szn) and tighten their seat belts during 20% market drops because volatility is awesome for a coin that aspires to be a fully-backed crypto stable currency. Surely no one will discount VOLATILITY into Ohm price when they make their purchase decisions. Need I remind everyone that our runway and treasury value comes from Premium and that Premium comes from high Prices?
"Volatility is okay we don't need to be scared of it" - I must have missed the Medium article where Zeus talked about Ohm as a degen leverage coin that also gave you 100K APY. All the Medium articles I read were about controlling our own destiny, RISK-FREE value, boring discount bonds, and defending a price peg. Does Olympus want to be HIGH beta or LOW beta vs the DeFi market? Being LOW beta has worked out well so far but the Pros tell us that increasing our beta will take us to new heights. Nobody knows if that's true or not. It's disingenuous to present that notion as DeFi gospel.
"New integrations are good" - New integrations are good if they ADD value and are not moving Olympus further away from what it is or aspires to be. DeFi is full of shitholes. Piling shit on top of more shit doesn't make things less shitty. I concede that Whales will do what they want so let them use Ohm if they want to take on more risk.
"wOhm is a better collateral than Ohm because Ohm decreases value" - This is a feature not a bug. At some point sOhm will not emit 6-digit APY inflation gains and so you're just left with vanilla Ohm. Should we build deep integrations around this temporary and artificial construct? Should we incentivize MORE degen behavior by giving them huge IV leverage PLUS huge rebase APY?
"You're still staked it's just a representation of sOhm" - If you have a Certificate of Deposit (CD)-which is a decent analogy to sOhm-that's an asset and you can add it to your net worth. If you could somehow take this CD to the casino where the game is totally rigged in your favor (99% chance of winning) and put it up as collateral. Is it still an asset? No by definition it's now a collateral. You have conceded a degree of control and ownership to the casino. What people actually do is PULL THE CASH OUT and then go to the casino. And in the case of wOhm you have not only risked your own stake, but the stake of others by exposing them to price risk that they have no control over and reaping the gains for yourself.
"Whales who want to degen would otherwise unstake their sOhm and sell if we don't wOhm" - By allowing wOhm to be used, the best RISK-ADJUSTED return belongs to Pro(3,3) not the SD(3,3). If we have all these Ohm whales are just itching to sell their huge stack WHAT ARE THEY WAITING FOR? Maybe it's because they'd be giving up the 100K APY and they would be unable to get back to their original entry price. Maybe they want to have their cake and eat it too.
New use cases are good. Integrations that are in alignment with the Olympus vision are good. I don't understand why I need to keep reiterating this point but I am FOR wOhm and FOR FUSE pools (and other pools) that are integrated with regular Ohm. But more importantly I am for keeping boring (3,3) as the UNIFYING DOMINANT STRATEGY with the BEST RISK-ADJUSTED RETURNS.
FWIW, I agree with Lux wholeheartedly on all of the above.
I believe that the heart of Olympus is (3,3). This meme perfectly encapsulates what actually separates Ohm from other hyperinflationary shitcoins. Game Theory and community spirit is what binds us, not the 100K APY and not autocompounding. (3,3) MUST remain the dominant strategy which means HODLers receive the best RISK-ADJUSTED gains. Anything that could undermine (3,3) needs to be scrutinized.
This is really the heart of the issue. Most binding decisions should be filtered through this lens, IMHO.
luxophyBBZG I agree we always need to keep the vision in mind and greed makes it very easy to lose track of that vision. I'm curious what your thoughts are on my comment just above yours?
I may be off base here and/or Zeus may have other plans to solve this problem, but I've viewed the riskiest moment for Olympus as that period of transition from high yield driven demand to stable unit of account driven demand. I struggle to see anyone utilizing OHM outside of (3,3) while yield is >=10,000. We may end up with projects that integrate OHM, but no one uses it due to the opportunity cost. wsOHM is the first thing I've seen out of this community that I felt could help bridge that awkward phase.
JFry4 Right now the runway is at about 150 days at the current APY. You can extend it by lower the APY but unless the Treasury is growing exponentially as well the emissions will soon catch up. I think your 2 - 5 year timeframe is very very optimistic. This is why maintaining price stability (the premium) is higher priority than adding new use cases that increase volatility IMHO. I would imagine that sooner rather than later APY will have to shift to linear (but still high) and not exponential.
I still don't see how adding more functionality as proposed changes the nature of (3, 3) being the dominant strategy. (3, 3) remains to be the dominant strategy after all, because you do not get the additional functionality without (3, 3). IMO that point is very important. On the flip side you say people should unstake, which is completely against (3, 3). So my vote remains for keeping sOHM and adding wOHM.
PS: calling it wsOHM is not simpler. wOHM it is IMO.
I already posted this in discord but I wanted to get it here after Rari hack.
I propose we do absolutely nothing but make OHM awesome. V2 improvements, hades; just work on Ohm. This should be a lesson to all we have a really good thing going here. If you don't understand how much money you're making staking ohm then idk what to tell you. We have a golden goose here and can't risk jeopardizing that. DeFi is completely irrational and unhinged from reality in its current form. I say we wait until the bear market to see which projects can stand on their own feet before we make any crazy decisions. Patience is the hardest thing when you see poopoo coin up 20x on the day. Patience ohmies. We are better than that. Fortune favors the patient. 3,3
2 months later
kschan locked the discussion .
kschan changed the title to OIP-6: Wrapped OHM and Improved Staking .