How can we prevent arbitrage? We don’t want a whale to be able to swap from sohm to wohm to ohm to s ohm and keep making small amounts of profit.
OIP-6: Wrapped OHM and Improved Staking
Love this idea especially as suggested with V2 we get a taste of the fuse pool in rari.
Cheers lads.
Zeus can we just name it wsohm instead of wohm , just to make it easier to understand it
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irc if the goal is to prevent it from being traded, i think the objective is still accomplished in this example. Sure, it gets added to rugswap, but 1) who is using rugswap (probably not that many people), 2) how much demand will there be overnight to trade it? (probably not that much, at the end of the day its still just OHM), and 3) what stops us from just blacklisting rugswap in the morning?
Just to make sure this isn't misunderstood, the blacklist would prevent coins going in but not coming out, so rugswap LPs would not get rugged (kek), they'd be able to take their wOHM back.
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Don_G_Lover Alternatively, since wOHM's redeemable value would be multiplied by the index similar to how sOHM would grow, we could have the UI show what the equivalent OHM balance is for the amount of wOHM.
That way we can keep the simple "numbers go up" that people like to see, though admittedly not as rewarding, but also keep ourselves to two tokens.
This is important milestone imo. If pricing of collateral will be implemented well, even with steady price of OHM the wOHM collateral would appreciate and lowering the liquidation risk, same if the price will go slowly down and rebase would be able to cover the difference.
Additionally it could lower the sell pressure, as instead of cashing out, people could use their staked OHM as collateral to get a loan, if interest rates will be reasonable.
I posted this on discord but wanted to float here.
What if wrapping OHM (assuming staking sOHM stays) causes a 0.5% wrapping fee? This effectively is a low barrier but incentivizes vanilla staking which is incredibly lower risk to new users.
Wrapping = composability = possible failures
This shit is so bullish for OlympusDAO it is not even funny anymore. We can only expand if we add utility. We get utility via protocol integrations. The more we embed OHM into DeFi the greater our odds of overall success will be to realize our vision. Adding the functionality of wOHM is super cool. I would vote for the proposal and keep sOHM because I think not everyone wants to play the degen game. The titanium reinforced (3, 3) ohmie hands should not suffer from more complexity. So let's keep it simple for them. Degen ohmies can go the extra route and play DeFi in hard mode. More power to you my fellow degen ohmies. Love the proposal. LFG
Oh, also I somehow, accidentally voted against this... meant to vote for keeping sOHM
I have some questions.
- When we wrap sOHM to wOHM, is it a correct assumption that we're swapping sOHM for wOHM?
- What happens to the sOHM that was wrapped?
- Am I correct in my understanding the wOHM will still get the benefit of the rebase? I got confused with part that you said about "wOHM, a static token that is composable with other protocols".
- If, and when we plan on creating a fuse pool for wOHM, users would be able to borrow wOHM as well. Who is going to get the benefit of the rebase? will it be the lender or borrower?
- Will there be a way for users to exchange their wOHM back to sOHM?
Ya good idea,,, MORE DINO CHART PLZ
Jawesome ummm [stake n wrap] 2nd button
Zeus Ah, the clarification around retrieving the wOHM after a blacklist changes things. Originally I thought that wOHM would just be stuck and this was my primary concern.
If the team is confident that this type of blacklisting will take care of the major concerns we have then I am for it as well. I want to see wOHM run free with all the other money legos.
Wrapping sOhm and putting wOhm on FUSE are two very different proposals. We should separate the two issues for a vote.
Old 3,3
Ohmies stake on OLYMPUS and do nothing but watch the money pile up. Price stability is what they want or if prices go up even better. If price goes down they're not concerned as long as they see other Ohmies holding strong (e.g. the % staked doesn't change). Price stability > 3,3 > Price stability self-reinforcing cycle due to low liquidity and 3,3 mentality. Non-Ohmies see Ohm price stay the same during a bear market they want in. There's no tail risk because the Ohm staking contract doesn't interact with any other Protocol and there's no price oracle. Sure Ohm whales can sell and do whatever with the DAI they'd get, but they'd be giving up the 100K APY so it would not be a decision to be taken lightly. 3,3 is Game Theory approved and battle-tested during the last downturn (2 weeks ago).
New "3,3"
Ohmies stake on OLYMPUS. Most choose to "wrap" their sOhm so they can lend on FUSE b/c they get the rebases + lending rate. On the surface there's no difference between staking on Olympus or depositing in FUSE. However, they don't price-in the new risk factors. FUSE pool has liquidation risk and smart contract risk (price oracle / flash loans). It's possible even probable (given long enough time horizon) that they could lose wOhm even if they don't borrow anything. Only Whales have enough Ohm to bother with borrowing (at 800% collateralization ratio). So they're not "selling" their sOhm/Ohm but they are putting it at risk. They can "lose" their Ohm to liquidators who will then immediately sell on Sushi so saying the whales aren't the ones selling is disingenuous. Tail risk is increased but nobody knows by how much.
Now (3,3) has been split into two camps: W(3,3) vs S(3,3) with very different risk profile. S(3,3) get none of the upside for the volatility but they do get hit with the downside. They also realize that they are essentially subsidizing W(3,3) behavior. Why would the S(3,3) stay put?
We already know what happens when there's a price shock. Not even a week ago the Sushiswap price oracle was broken and everyone thought the price was still at $1500 when it was actually at $1050. When that error was corrected, it launched a wave of unstaking and selling which we still haven't recovered from. Why wouldn't FUSE exacerbate this?
To be clear: I'm FOR FUSE. I'm also FOR wOHM. I'm AGAINST wOHM on FUSE. You want to leverage and take on FUSE risk? Unstake and concede your (3,3) rewards. There's no reason why leveraged Ohmies should be rewarded for putting their stash at risk in a degen pool. If they put up regular Ohm in the FUSE pool, they are essentially getting 10X leverage already (using $80 IV as the baseline) giving up a 100K APY is not unreasonable.
If this gets passed, what about a whitelist instead of a blacklist? i.e. everything thats not blacklisted is whitelisted. This way it can start rari only, and then we can vote here or on scattershot to add new protocols as desired by the community.
i've been on the fence about this proposal since it was brought forth mainly because it's brought up a fair bit of conflict and I think that can be detrimental to a nascent protocol as innovative as this one, which is already difficult for most people to wrap their heads around as is.
I've voiced various concerns in discord, however I do think that IF done well (and I do have a lot of trust in the Olympus team), then this can really grow the protocol and give us that money legos boost.
I think for the most part I am for this proposal, however, due to how much confusion this has brought up, I think if this update is pushed, it will need an immense amount of care when it comes to the UX/UI with little question mark-y hover-your-mouse-over pop-up windows explaining things VERY clearly.
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Why not distribute the first wohm via airdrop? This would kickstart liquidity. Unstaked ohm holders could be airdropped wohm proportional to the rebase amounts they lost out on.
This would help expand sohm ownership base to anyone who held a good deal of ohm for some time (o*t)
We could also do the drop on matic
I'm not sure you understand how the protocol works, feel free to hop into the discord and check out some of the forums or ask around to get some explanations.
Also, I think olympus dao should steer clear of matic and all layer2 until they are thoroughly battle tested, and even then maybe it should stay on L1 forever since it isn't a tx heavy ux.
I am FOR wOhm, Fuse and keeping sOhm. I would like us to do a cautious rollout of the Fuse pool, with initially high collateral requirements (can only borrow up to 20%) to maximally reduce the odds of liquidation. I am against any fee on wrapping.
Reasonning:
- I think we should support all the usecases that DAI supports, including composability. I think this is a core value proposition of OHM long term. If we can execute on this vision, Ohm will be a black hole absorbing the stablecoin market.
- We're small and nimble. We can afford to make small mistakes, I think we should open the door with the fuse pool and reevaluate IF bad stuff happens. Move fast and break things, it's ok to make mistakes and learn.
- We need to start building trust with the defi ecosystem and key partners. Rari is one of these, among many others.