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  • RFC: Expansion of Vendor Finance Partnership

Lemme see the whole 'Vendor Strategies' thing is presented as something new and exciting. But does it really offer anything groundbreaking to Olympus? And let's not forget where all this comes from. Vendor's system is simply a rehash of the defunct Ruler V2 contracts. Sure, reusing old contracts might be quick and convenient, but is it truly innovative? It's pretty hard not to compare it with the bespoke solutions like Cooler that were built from the ground up, specifically for Olympus.

They're quick to trumpet a 99% utilization rate of their V1 pool, but seem to conveniently gloss over the hefty fees that accompanied it. Now they're offering a simplified fee structure with V2, but is that enough to put treasury funds at risk to boost TVL of an unproven protocol?

Their call for diversifying our involvement across multiple platforms sounds good on paper. But in practice, it might just end up creating more opportunities for third parties to profit at Olympus's expense. Is that really a gamble we want to take?

And then there's the proposal to establish a $5M pool on V2, and the choice to use OHM instead of gOHM for collateral. On the surface, it might seem reasonable, but a deeper look suggests it's a strategy that's more beneficial to Vendor than Olympus.

So, yeah, while Vendor's proposal might seem impressive at first glance, we need to unwrap the package and look at what's really inside. It's essential we dissect these proposals to ensure we're making the best decisions for our community. Just food for thought.

    0xTaiga Coolers are borrower-specific contracts with a delegate() function that allows the owner to point their governance power toward a designated address. Hope this helps.

      Shpadoinkal For sure, its a major consideration. I just meant that from a technical perspective I'm not sure how well all the various platform can be integrated into OCG. Using a delegate functionality might work today while using off-chain Snapshot votes but that likely won't be possible when you move everything on-chain (there might be alternative solutions of course, like using receipt tokens).

        citizen_wayne Thanks for the detailed response. Some notes:

        Strategies simply put unused capital to work and are entirely optional. From Olympus' perspective this can help ensure that any funds that aren't being borrowed out on the terms that they set are still being productive in some way. If the Olympus team or the community feels that it's not worth the effort, they can choose not to use the strategies.

        Vendor is completely written from the ground up and is not simply just rehashed Ruler V2 contracts. We encourage comparisons between the two protocols and are open to feedback and criticism of our proposal, but I don't see the value in minimizing the effort we've put into building this protocol. Ironically, at Vendor's inception, Olympus was the first project we spoke to. Originally it was literally built from the ground up with Olympus in mind.

        Even with the "hefty fees" of V1, the pool is still seeing high utilization. It seems to be the case that a decent number of Ohmies feel that this is a service that they are willing to use, and have been using for the last 3 months. We have not heard any complaints from anyone in the community so far, so I'd say that it's been a success so far. To be fair, as far as unproven protocols go, Cooler is just as unproven as Vendor V2 is. We have no issue with the existence of Cooler and are open to coexisting, but I think it's disingenuous to imply that Cooler loans are somehow more battle tested than Vendor V2 simply by virtue of it being launched by Olympus.

        The reasoning behind listing gOHM instead of OHM is that based on OIP-133 the staking rate of OHM will be gradually reduced to 0% thus removing the benefits of holding gOHM over OHM. Based on the wording and outcome of the OIP, it seems that the community would like to use OHM in place of gOHM. From our perspective either token works, and being that Vendor is permissionless, Olympus is free to deploy a pool with either token. We do not gain any extra benefits from having OHM listed over gOHM. We simply want to list the asset that gives the most utility to token holders. If it's shown that gOHM is the better option, then we have no issue with that being the collateral token.

        Again, thank you for your detailed response, and as I said we are open to feedback and criticism of our proposal.

          citizen_wayne
          This is incorrect on all points.

          1. "Lemme see the whole 'Vendor Strategies' thing is presented as something new and exciting. But does it really offer anything groundbreaking to Olympus?"
            Vendor Strategies is a convenience that will allow treasury funds to make yield even when not used. This can be disabled if DAO decides to do so. We do not deposit locked collateral anywhere either. So I do not understand their attitude towards them. It is a good feature that no one else has. Simply that.
          1. They're quick to trumpet a 99% utilization rate of their V1 pool, but seem to conveniently gloss over the hefty fees
            In v1 we have only made money when Olympus did. So argument that we charge a hefty fee is just obnoxious. We have also waived the DAO any fees on defaulted collateral. You are either unaware of that, or you are just refusing to see this.

          1. but is that enough to put treasury funds at risk to boost TVL of an unproven protocol? -
            You prefer undeployed contracts that have never held a peny in them over a protocol that already went above and beyond for Ohmies and operated well so far. This is just unreasonable and I am not even going to address this further

          2. Vendor's system is simply a rehash of the defunct Ruler V2 contracts
            Vendor is a protocol written completely from scratch. I can back and explain every decision I made while writing it. Ruler V2 is not even a thing and never was. Ruler does not even have the ability to match lenders with borrowers. It relied on 0x and curve for that. Cooler is for example much more similar to Vendor than anything. Code for both is public and I can comfortably state that. Timeline also speaks for itself. In fact, they are so similar that when you critique Vendor you critique Cooler pretty much. I do not think you realize that.

          3. And then there's the proposal to establish a $5M pool on V2, and the choice to use OHM instead of gOHM for collateral. On the surface, it might seem reasonable, but a deeper look suggests it's a strategy that's more beneficial to Vendor than Olympus.
            I do not think this is worth discussing as there is no single example or proof of this. In fact, this entire comment is baseless hand-weaving without a single fact. You want facts - talk to me. Happy to offer them to anyone.

          Message #general

          • Jem likes this.

            citizen_wayne

            This entire assertion is patently untrue, and as a member of this community, I feel obligated to ask: Are we genuinely recognizing the unwavering devotion Vendor has consistently demonstrated towards Olympus? This commitment did not falter, even when their chance to participate in our Incubator program was suddenly withdrawn. Despite this hurdle, Olympus continues to be a crucial component of Vendor's strategy – a fact highlighted by Olympus-specific provisions seamlessly incorporated within their contracts.

            I've seen Vendor's proposal hastily dismissed as a mere Ruler clone. A brief comparison of Vendor and Ruler contracts quickly debunks this claim. Vendor had in-depth discussions with Zeus, sharing their innovative ideas - some of which curiously resonate in Cooler Loans. Coincidence or not, it's fair to recognize Vendor's original contributions, especially considering how they've added utility to gOHM.

            These instances underscore Vendor's unwavering efforts to form a strong bond with Olympus. They've rebounded with a pragmatic, thoughtfully-crafted proposal. As a community, it's incumbent upon us to appreciate such dedication when weighing our options.

            Further, Vendor's contracts have been rock-solid, providing all OHMies with some of the finest loan opportunities. This affirms their proven expertise and reliability.

            Finally, let's consider the impression we're projecting to the broader DeFi sphere. Are we genuinely keen on forging effective partnerships, or are we sometimes too engrossed in our own initiatives, and risk mindlessly echoing Zeus without thoroughly considering all possible avenues? It's high time we remain open to alliances that genuinely enhance Olympus's standing, especially those with protocols demonstrating superior expertise in certain areas.

              While I appreciate your feedback, let's take a moment to reflect on the absurdity of framing the waiving of fees on collateral as some grand gesture. How gracious of you not to charge us when we're left holding the bag on defaulted loans. It's increasingly evident that there's a striking imbalance between the risks shouldered by the Olympus treasury and the rewards reaped by third parties. And let's not forget, without us, Vendor wouldn't even have a user base to begin with. Moreover, it's rather ironic for Vendor to claim they went "above and beyond for Ohmies" while simultaneously criticizing the Cooler contracts for not being deployed yet. Let's not overlook the fact that Vendor contracts wouldn't have been tested with a penny if it weren't for our involvement. It's crucial to acknowledge this minor detail.

              In stark contrast, we have our very own homemade solution, Cooler, which, in terms of incentive alignment, is the superior path forward. While Cooler still requires further consideration in certain aspects, it does, at the very least, share risks and rewards within the Olympus ecosystem, sparing our treasury from the hefty fees that Vendor seems so eager to downplay. These concerns serve as a reminder that we should carefully think through these matters. As for this proposal, the question remains: Should we continue giving away money to projects that don't share any risk with us? Given the substantial amount of money at stake, I strongly believe it's crucial for us to thoroughly consider the ramifications of this proposal before making any decision.

                citizen_wayne

                it's rather ironic for Vendor to claim they went "above and beyond for Ohmies" while simultaneously criticizing the Cooler contracts for not being deployed yet.

                No one criticized Cooler contracts for not being deployed. It's just objectively true that they aren't deployed or at the very least they haven't been used yet. When I mentioned that, I was only arguing with the assertion that Cooler's contracts are more battle tested than Vendor V2. I'm not making a claim that either contract is better than the other. I'm simply stating that contracts that aren't deployed or haven't been used cannot be more battle tested than contracts that are in active use.

                Let's not overlook the fact that Vendor contracts wouldn't have been tested with a penny if it weren't for our involvement. It's crucial to acknowledge this minor detail.

                This would be a valid point if it was true. While the Olympus pool does currently make up a large portion of our TVL (which we are very grateful for), prior to Olympus lending, Umami DAO was lending on Arbitrum. They were lending around $100k at a very low LTV and during that time, along with different lenders, we reached a peak TVL of ~$1.74 million. This info is freely available on DefiLlama if you took the time to look into it. Again, criticism of the proposal is welcome, but we'd appreciate if the criticisms were done in good faith.

                These concerns serve as a reminder that we should carefully think through these matters. As for this proposal, the question remains: Should we continue giving away money to projects that don't share any risk with us?

                It's disingenuous of you to frame lending on Vendor as "giving away money". Yes lending is not risk free and due to potential defaults, the DAO runs the risk of losing some funds. However this is exactly why we give lenders so much flexibility on the terms they want to lend on, as a way to mitigate these risks.

                I was hesitant to respond to this because it doesn't seem like you're actually interested in engaging with what we're saying. You largely ignored the content of the replies to your initial comment and have just listed off more complaints. These complaints are fine to have and you are welcome to voice them but when I posted this proposal I was hoping we could have a productive conversation, rather than having to ward off smear campaigns.

                  citizen_wayne You ser are very misinformed and do not come across in a good manner whatsoever.

                  The expectation not to incentivise builders (i.e. pay fees) to build on top of and utilize OHM in products outside of Olympus is a ludicrous statement. Why shouldn't we pay fees to those who integrate OHM into the wider DeFi ecosystem? What we need is adoption and being so against paying a minor fee to others is not the way forward.

                  citizen_wayne How gracious of you not to charge us when we're left holding the bag on defaulted loans.

                  What is your point here? The same situation happens with both Cooler and Vendor in the cases of defaulted loans.

                  citizen_wayne And let's not forget, without us, Vendor wouldn't even have a user base to begin with.

                  Incorrect, Vendor had a previous partnership with Umami DAO with a TVL of >$1M, which is over twice as large as the current Olympus partnership.

                  citizen_wayne Let's not overlook the fact that Vendor contracts wouldn't have been tested with a penny if it weren't for our involvement. It's crucial to acknowledge this minor detail.

                  This minor detail is incorrect and so doesn't need acknowledging.

                  citizen_wayne In stark contrast, we have our very own homemade solution, Cooler, which, in terms of incentive alignment, is the superior path forward.

                  Vendor was initially built under Incubator and so could also be considered a "homemade solution"

                  citizen_wayne sparing our treasury from the hefty fees that Vendor seems so eager to downplay.

                  See previous point above fees…

                  citizen_wayne Should we continue giving away money to projects that don't share any risk with us?

                  What do you exactly mean by giving money away? Olympus as a protocol earns 100% of the interest on the loan(s), fees are paid by the borrowers. Think about it in this sense, is 0.3% in fees such a "hefty fee" if it's on Arbitrum and thus avoids Ethereum's gas costs?

                                citizen_wayne Most of the message you have sent was dissected by others and in-fact addressed by me on Community Call. If you could attended that would of been great, but I did not quite expect that.

                                In regards to "hefty fees" we are looking at making about $1250 after 6 months. That is not a small amount by any means but neither it is hefty for this service and amounts of money involved.

                                  First off, it's crucial to underscore that raising concerns about investing capital into an unproven protocol shouldn't be labeled as a "smear campaign." This approach is simply a matter of sound due diligence, particularly when we're being asked to stake a substantial portion of our treasury into Vendor. Brushing these concerns aside rather than addressing them directly merely signals a lack of concern for Olympus's well-being.

                                  Unfortunately, we also cannot dismiss potential conflicts of interest. Concerns exist that Vendor may have influenced an individual, who should ostensibly be advocating for Olympus, to endorse the allocation of our hard-earned DAO treasury reserves to Vendor for personal gain. It's unequivocally clear that Olympus's interests should always take precedence, and we should not tolerate any actions that prioritize personal gain over the community's welfare.

                                  The fee and earning structure is next in line for discussion. We shouldn't be misled by the assertion that "the protocol takes home 100% of the loan interest, and the borrowers shoulder the fees." When we choose to collaborate with Vendor, we are forgoing potential earnings that could have been secured with a commission-free alternative like Cooler. Every dollar that borrowers pay to Vendor represents potential revenue for Olympus. We cannot overlook this opportunity cost, especially now that Vendor is requesting a larger commitment from us. Our treasury is one of our competitive edges to launch products, so why should we give it away for free, let alone pay to deploy it?

                                  Finally, let's look a bit closer into the topic of Vendor's TVL. Their TVL peaked at a modest $1.7M, and they are now seeking $5M from us. It's clear as day that they need us more than we need them. And let's not forget that this peak TVL was achieved with their v1, while v2 hasn't held nearly as much and therefore hasn't been battle-tested much more than our yet-to-be-deployed Cooler contracts. Why should we risk $5M on an arrangement where Vendor sidesteps the risk but stands to gain the most? It's also worth noting that a significant portion of their TVL came from their association with Umami, a known rugpull. It's troubling to even consider that the Vendor pool might have been used by the rugpuller to offload and dump Umami against Umami's unsuspecting treasury, which was lending stablecoins on the other side. We need to question whether it's wise to associate ourselves with such activities.

                                  If Vendor genuinely had Olympus's best interests at heart, they'd welcome our concerns with open arms and clarify rather than going on the defensive.

                                    citizen_wayne

                                    In order to once again demonstrate the fact that we do have Olympus DAO in mind and further align with the DAO/Community we are willing to waive any fees that Vendor Finance would otherwise charge. That would apply for both mainnet and arbitrum deployments.

                                      citizen_wayne

                                      citizen_wayne Concerns exist that Vendor may have influenced an individual, who should ostensibly be advocating for Olympus, to endorse the allocation of our hard-earned DAO treasury reserves to Vendor for personal gain.

                                      If I am correct in my assumption that this individual you are referring to is myself I can confirm I am not being paid or influenced by Vendor in any way shape or form. Any funds deposited onto Vendor by Olympus will not benefit me personally in any way shape or form either. So once again, you are false in your statements.

                                      I have used Vendor personally for a number of months now and really like their product, UI/UX and overall platform, which is the basis for all my arguments.

                                      If you believe concerns exist with me, a DAO contributor as a discord moderator, then you should also recognize concerns with nicnombre/Zeus (at no fault of his own) for a fair argument.

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