I think we should try to fight the fear that if treasury capital flows out to holders, it will never come back. I think thats only true if this network never delivers value in excess of the assets in its treasury. Otherwise only irrational actors default on loans. I think the positive outcome will be decided by whether the core components make OHM attractive enough from an r/r perspective to justify a premium. I do not think this is accomplished through treasury management and thus I see it as a positive to curtail these activities as a side effect of the proposal.
The question is: how much capital is needed to maintain those core components? I think that should be the guiding light. Inverse bonds would become irrelevant and bonds and BLE only require OHM, so the main uses of capital in my view become RBS and POL. Terms should be dictated by the minimum liquidity needed for those use cases.
0xTaiga But what will happen on Cooler when the price of gOHM will fall bellow 3k? The pool will be drained. Boorrowers will deposit cheap gOHM to borrow 3k, swap that for more gOHM and repeat. On Vendor oracle will automatically pause borrowing.
I don't think this takes into account the dynamics of the proposal. If the loan amount is available at all times to all tokens, there is no benefit to an automatic shutoff. In fact, I'd argue that would be more of a bug than a benefit, as it would act as a worst case arb. If the proposal was implemented without the full availability, this becomes a more legitimate concern.
Also, to be clear, I have nothing against Vendor. I just think the borrower-lender matching role (where Vendor adds the most value) is minimal here, and you can easily compute that hundreds of thousands of dollars would flow from this community despite it putting up the capital on both sides. With a viable alternative there's no reason to do that.
yieldohmie That being said, i think its super capital inefficient converting the entire treasury to dai and just let it sit inside the new protocol.
I think this misses the point -- the dai doesn't just sit there, it goes into the hands of the community who can utilise it as they see fit. I'd argue that this is more capital efficient than the status quo which is constrained and often conservative.
yieldohmie Olympus is right in the heart of DeFi and the next bull cycle will come eventually, the DAO has connections to every protocol imaginable and we will be for sure somehow involved in the next innovation that makes the DeFi market go 10x again.
I'd also caution against the speculation here. I'm all for keeping the call on this outcome (the proposal accomplishes this well imo) but it is by no means guaranteed and it worries me to see it taken that way and used to make decisions.
unbanksy33 I don't think I view the third party LP initiatives in the same light that you do. OHM today is a stable-ish coin that has perpetual bids as well as these programs that push incentives onto pools. It creates a farmers paradise countered only by governance risk at the expense of holders, who subsidise the yield with either dilution or exposure to volatile tokens to secure incentives. I don't see that as net positive until these two conditions are met: OHM trades above its backing (LPs take on risk) and there is ample volume flowing through pools to necessitate the liquidity. That said, it does have the benefit of reducing reliance on protocol owned xyk liquidity (which gets us closer to that second condition), and if this proposal were to pass you'd see the first condition met (or at least brought much closer).
On cross chain liquidity, I'm all for it, but I think you discount the effect that providing the community with liquidity can have (this actually circles back to third party LP too). Right now, you need to bring in external capital or sell tokens if they want to be an LP. With these loans, you could simply borrow against a portion and then pair it with another portion in an xyk or concentrated pool. Ample liquidity on Ethereum and other chains can arise from that if people see value in providing it.
