tex Interesting note may be that MakerDAO added other stablecoins not just to access more liquidity, but also to reduce correlation of Ethereum on CDPs. OHM may benefit from building a treasury not just of different USD-pegged stablecoins, but also other non-pegged stables and non-stablecoin tokens. I think sUSD is a safe start seeing the high C-ratios that SNX demands of their borrowers.

    5 days later

    Adding an addendum to this proposal in light of the recent alUSD proposal. It might be more beneficial for Synthetix if we accumulate the sUSD-DAI/USDC/USDT pool tokens on Curve. In addition to the pool fees there are also 1.9% SNX rewards so this definitely serves as a productive asset for the OlympusDAO treasury. The downsides are additional exposure to centralized stablecoins like USDC/USDT. This change would also be more in line with the Treasury-as-a-service 💎🙌 idea

      tex Good thinking. Why can't we do both though? Give people the choice if they want to run that risk. We have the exposure to USDC already via Dai anyway.

        a month later

        I strongly support this proposal. I think sUSD is the best bet for us among stablecoin, it diversifies us out of USDC reliance (which both DAI and FRAX carry), it is proven through thick and thin and has OG battle hardened Synthetix community behind it.

        Very keen on this proposal! Hope it put to a vote soon.

        Would prefer sCHF or sEUR. Decreases our reliance on the value of a dollar and sEUR has just as much liquidity in the system.

        sCHF is good for performance reasons, historically it has done well vs the dollar. Switzerland is a country which historically has a conservative monetary policy and very low inflation

        • tex replied to this.

          0xChimp Definitely, I think the idea here would be to accumulate sUSD first as the primary debt of Synthetix and then rebalance into non-USD options for the exact reasons you mention

          • Zeus replied to this.

              I think we might want to separate this proposal into two pieces:

              1) OHM-sUSD liquidity bonds
              2) sUSD reserve bonds

              Liquidity bonds carry a higher cost. We need to bootstrap a new pool to the point that it can be activity utilized by market participants (my assumption here is that point is >$10m, and we haven't even reached that with FRAX yet). The benefit of liquidity bonds is in higher liquidity for OHM, and that it is a safe passive yield generating activity.

              Reserve bonds have less strings attached; we can accumulate as much or little as we want. They also have more flexibility; this is where we can diversify into other synthetic assets, like sCHF, sXAU, etc.

              We should be cognizant that there are many potential pools we could benefit from, but we only have the resources to pursue a small number at a given time. I think if we go down the liquidity pool route, we should have assistance from the Synthetix DAO and be aligned that this is a pool we want to have. But, given the relatively low liquidity currently available on AMMs for sUSD, this is something I'd imagine we can rally the SNX community on.

              It'd be great to hear which of these, or both, you think are most important to pursue tex

                  Zeus finding myself a bit swayed in favor of a pool based on the role that we can potentially play in increasing sUSDs role within DeFi through greater buildup of liquidity. could be a great opportunity to team up with the spartans and flex the power of taas

                    Zeus I definitely think there's a lot to explore here about which strategy provides greater utility for both Olympus and our partners.

                    Liquidity Bonds in General
                    I think liquidity bonds might be more beneficial for smaller protocols that haven't bootstrapped liquidity to a significant degree or are seeking a bridge to DAI. This is even harder to assess for stable assets that can deploy a Curve pool with massive amounts of reserves to maintain peg. For example, FRAX has $214M deployed on Curve in a FRAX-3CRV strategy. This leads a lot of aggregators to route OHM->FRAX swaps through OHM->DAI on SushiSwap and then DAI->FRAX on Curve... instead of the OHM-FRAX pool we deployed on Uniswap v2.

                    sUSD Liquidity Bonds
                    Similarly, sUSD has $180M deployed in a similar strategy on Curve... except recently the sUSD portion has decreased (to "only" $24M of that $180M pool) as its demand has grown to shore up Synthetix c-ratios. I imagine that an OHM-sUSD pool will not make much of an impact on Layer 1, but could be a good candidate if we expand to Optimism eventually. Alternatively, we could consider holding non-OHM LP tokens as an important source of liquidity for our partners. Obviously looking at Curve pools here but the USDC/USDT components in most 3CRV strategies are a no-go for me.

                    sUSD Reserve Bonds
                    My thinking on direct sUSD bonds is much simpler in that it provides a diversification option to the treasury and soaks up protocol debt for Synthetix. The diversification option is one of the largest selling points of this proposal since it not only offers non-USD stable synths but other assets not available on-chain in a non-custodial form... sBTC anyone?

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