TL;DR: Support the launch of [REDACTED] as a complimentary SubDAO and extension of the Olympus protocol which allows Olympus to efficiently, sustainably, and fairly venture into the Curve ecosystem while not deviating too far from the Olympus initial core values.
The concept of turning Olympus into DeFis central bank is the narrative that led us all to fall down the rabbit hole that OHM is today. As this protocol grows, it is important that as a protocol, we don't defer from the narrative too hard. Today we would like to propose the protocol [REDACTED] to the Olympus community, a complimentary SubDAO and extension of the Olympus protocol which allows the protocol to venture into the Curve ecosystem. The first of many solutions that will help Olympus scale to new markets while keeping the core narrative and focus aligned.
What is [REDACTED]?
When users invest in Curve ecosystem tokens they will naturally be seeking the highest yield for the risk taken. When interacting with [REDACTED], they will bond their tokens through metamorphosis and will receive an equivalent amount of discounted $BTRFLY. By locking up their Curve ecosystem tokens in our treasury, they are effectively taking them off the secondary market, decreasing the circulating supply available. In addition to the secondary market liquidity shortage, the tokens will also be used in various yield strategies to further grow the treasury, which ultimately increases the intrinsic value of BTRFLY. This positive feedback loop creates a constant upward pressure on the fundamentals of the protocol, allowing for natural growth of the treasury, thus, increasing the underlying value of BTRFLY.
There are no fees charged on the protocols behalf, rather the protocol generates revenue from selling BTRFLY tokens and keeping a portion of the yield produced. Each BTRFLY costs the protocol one dollar of $OHM to mint, setting the protocol's minimum value. If the price of BTRFLY is less than one dollar of OHM the protocol will buy the token to reduce supply and bring the price back to one dollar of OHM. While the price is above one dollar of OHM the protocol profits from the spread between the inherent cost to mint BTRFLY and price the token is purchased.
Metamorphosis is the process under which yield deprived LP’s and governance tokens are transformed into blooming BTRFLY tokens, that shine to their full capacity from the efficiently maximized returns. When users purchase BTRFLY on [REDACTED], they are able to secure a discount from the market price.The discount is based on a lever built into the protocol. CRV is then locked inside the [REDACTED] treasury, which could be either staked directly on Curve, or on Convex depending on the yield offered. The protocol will quote the purchaser with terms such as the price, the amount of BTRFLY tokens entitled to the purchaser, and the vesting term. The rewards accumulated will be available to claim when the user unstakes their BTRFLY. The longer the period staked the larger the compounding effect of the yield.This approach allows users to have flexibility in their investing approach, choosing between a short, medium and long-term investments.
Price of Metamorphosis
The price of BTRFLY will follow the concept of a Dutch auction, where the discount increases if there is a lack of BTRFLY purchases. As soon as a purchase is made the price increases dramatically, and proceeds to incrementally decrease until another buyer emerges. This process continues and allows the market to decide an appropriate price, without the use of an Oracle.
After purchasing BTRFLY, the token can be staked to receive staking rewards in the form of xBTRFLY. The rewards are a function of the current established reward rate by the protocol and the earnings of the protocol generated on the deposited funds. When staking, the BTRFLY token will be locked and an equivalent amount of xBTRFLY will be issued to the staker. Every epoch, the balance updates based on the allocated rewards and accumulated earnings, which are transferable and therefore composable with other DeFi protocols. When the user decides to unstake, the minted xBTRFLY will be burned and an equivalent amount of BTRFLY will be received. After unstaking the staking rewards will no longer be accrued.
Initial Bootstrap / pBTRFLY
Our pBTRFLY model is based on OlympusDAO’s pOHM supply-based vesting structure. Contrary to the time-based vesting method, since pBTRFLY is vested based on the circulating supply of BTRFLY, this means that pBTRFLY cannot be easily dumped into the market. pBTRFLY holders will have to wait patiently for the habitat to grow more BTRFLY before they can acquire more BTRFLY. This softens the sell-off pressure from the stakeholders and allows everyone to continue to hodl and buidl for the long-term vision. Moreover, BTRFLYs tokenomics structure adds value to long-term pBTRFLY holders. As the treasury accumulates more assets (from the Curve ecosystem), the value of BTRFLY will grow. If the tokeonomics principles ring true, the longer you wait, the more likely stakeholders will see the upside potential of BTRFY. The backing of the newly minted BTRFLY strengthens the DAO to continue to grow their treasury with the added capital. The distribution of pBTRFLY is as follows:
Core Team 25m pBTRFLY 9% Supply Share
Investors 5m pBTRFLY 5% Supply Share
OlympusDAO 20m pBTRFLY 10% Supply Share
REDACTED Community / Treasury 50m pBTRFLY No supply share
Leveraging [REDACTED] As The Vehicle for Olympus to Enter the Curve Ecosystem
To many of you, you may be asking, why doesn't Olympus just add these same tokens as bonding collateral?
Imagine [REDACTED] as a SubDAO of Olympus where we focus specifically on the Curve ecosystem while not giving up too much liquidity in OHM in order to build a significant holding position, and instead use $BTRFLY, which is not a new reserve currency or a competitor to OHM but rather a different utility token that has its own purpose and value generators (refer to the $BTRFLY effect above). While we as a protocol could just launch with just CVX bonds, we will just be joining the lot of other protocols that are doing the same. If we want to truly enter and most importantly win over the Curve community and have a successful position in the imminent CRV wars 2.0 we would need a protocol that focuses specifically on Curve liquidity, voting distribution, etc. Hence creating a new branch to Olympus where we add not only CVX, but other strategic risk assets like FXS, TOKE and more. We will be able to extend the reach of the Olympus protocol and successfully enter the market.
In Curve’s short lifespan it has been proven that protocols that do not put all their resources towards winning over the Curve community, will not have success in their efforts. Refer to the image below which shows Convex growing position in veCRV compared to protocols that use Curve to its advantages such as Yearn or StakeDAO. [REDACTED] will join Convex as one of the players that can accumulate a significant holding of veCRV due to our mission and dedication to our covenant. We fear for Olympus that if we simply offer OHM at a discount to build a position in CVX it not only deviates from our core values and vision, but also does not bring enough to the table to persuade significant Curve liquidity providers and whales to bond liquidity with us.
We look to position ourselves as an extension of Olympus, where Olympus does not have to compete with other more focused competitors such as SquidDAO, but rather embrace the eventual future of Olympus becoming a multi token ecosystem where there is subsets of Olympus products that hone in on ecosystems like for example Curve. As our protocol grows, we can develop and position it in a manner that makes it directly benefit the Olympus protocol, detailed description on this in “What We Bring To Olympus”.
Some Unique Innovations We Bring To Olympus Beyond the Curve Focus
Uniswap V3 Range LP Pool2 - Leveraging Gelato automated smart contracts to edit the ranges of our Pool2 LP token to keep liquidity only filling orders near token price on every rebase. Preventing severe bank runs and price pumps.
Computer Aided Governance - This post is long enough lol, our team is comprised of Token Engineers from places like BlockScience that have some unique outlooks on governance efficiency, read more here: https://mirror.xyz/0xE90c74145245B498fef924fAdC7bb34253c7cF90/P3WdbpFJd40nn8nrrWycU3A5u4u-sn6HjKPlZ5PsIns
UMA KPI Option Bonding - Gives purchasers the right, but not the obligation to purchase xBTRFLY for a predetermined price at a predetermined time. An example would be: selling a Call Option for Bond Prices. Issuing a call option that gives you the right but not the obligation to buy LP Bonds at a predetermined price after say a month.
*A concept that has only been discussed and not had any code produced yet.
What Do We Need From The OHMies?
We simply want to be viewed and included as a friendly extension to the Olympus ecosystem. We will work in collaboration with the protocol through ways of a SubDAO focusing on the same mission, just from a different angle. Nothing else.
What Do We Bring To The OHMies?
20% of pBTRFLY supply with a 10% supply share
Initial launch hosted through Olympus Pro, 5% performance fee of sale shared with the Olympus DAO
A new token in the Olympus ecosystem, serving as a focused SubDAO of the protocol that will serve on behalf of Olympus best interests in the Curve ecosystem
Increased utility to $OHM token through creating new bonding application for OHM through [REDACTED]
Once passed whitelist, Execute bribes on behalf of other protocols and share revenue with stakers of both $BTRFLY and $OHM
It is fair to say that the protocol currently faces an uphill struggle. As newer protocols based on similar architecture come to market with their own promises of colossal returns and slightly altered narratives, the focus of Olympus being the core reserve currency of DeFi face an existential threat where forks distract not only liquidity but adoption of the protocol elsewhere. While it is easy to celebrate the protocol as a success when it is rapidly expanding, true tests will come when growth slows. This blog post is too long but would like to share a thesis which speaks for itself if you would like to view this addition to the Olympus ecosystem from more of a network effect perspective, the Fat Protocol Thesis.
Bonus: Addressing Some Misconceptions 🙂
This protocol is built by Ohmies. We will not launch this without your support. If for whatever reason you feel as though taking in some CVX to the treasury for a few weeks is a better idea then utilizing [REDACTED] to enter into the upcoming Curve Wars 2.0 we will forfeit the project, no longer pursue it, and assist the DAO in whatever capacity we can with the Convex proposal. We desire your assistance in helping bring this vision to life and would never put an idea out that would compete with Olympus in any shape or manner.
When this idea originally came to our team's mind, we believed it to be a unique value-add to Olympus which was capturing market share in an ecosystem that is truth be told, out of reach for what Olympus and OHM is trying to solve in its vision.
To the majority of you, this next bit will not mean much but while this project does not have a huge following yet, we would like to address some misconceptions that a few of you reading this may have had when you came across us. The plan from day one has been to launch this hand in hand with Olympus, anyone from our community who has read even the draft of our Gitbook from weeks ago can vouch that we dedicated pTOKENS to Olympus and outlined the different ways we can work together and specifically mentioned that we will not launch without Olympus support. In hindsight this may have been foolish, but we genuinely wanted to share this idea with you all when we had more docs and did not want to come to the community as just another fork and recognize now that this initial plan may have seemed shady or malicious. Not recognizing the little traction that we did receive from our intro paper put a bad taste in some of your mouths as we were not being fully transparent from day one. Again, we would like to sincerely apologize if you were one of the DAO members that felt this way, and if us taking that approach did not sit well with you, we will openly accept your skepticism and decision to not push this through. Luckily, a few prominent DAO members which we will not openly name have been extremely helpful since that point and let us know that if we are to move forward with this, we have to begin the process now even if it deviates from initial rollout plans, something we are more than willing to do. We look forward to your comments and questions and hope we can bring this vision to life.
Changes made since initial post:
- tl;dr snippet change "effectively" to "sustainably, and fairly"
- Added twitter link to the bottom of post
- Replace any mentions of Curve LP tokens to OHM as it further benefits the Olympus system and makes us less competitive.
- Added details on pBTRFLY for transparency on initial launch / bootstrapping
- Changed Olympus allocation from 15% of pBTRFLY to 20%
- Remove mentions of RomeDAO as competitors