• Proposal

  • TAP-26 - Expansion of Vendor Finance Partnership

Summary

The following outlines a formal proposal as a follow-up to the RFC “Expansion of Vendor Finance Partnership” found here, which outlines a mutually beneficial arrangement between OlympusDAO and Vendor Finance. Additional discussion surrounding the RFC can be found within the Olympus discord.

Background

The previously approved pilot deposit into Vendor (TAP-21) has been a great success to date and due to this we believe now is the right time to introduce an enhanced proposal that will deepen the mutually beneficial partnership between Vendor and Olympus. Building upon the constructive feedback and insight received during the RFC stage, we believe that establishing this TAP enhances discussion, and declares a definitive route for the Olympus community to consider. 

Updated Protocol Fee

The Vendor Finance team has reached the positive decision to completely waive the protocol fee on both Ethereum and Arbitrum. While Vendor would not benefit financially, the deepened partnership would continue to enhance the visibility and recognition of the Vendor protocol. This will also mean that Ohmies can borrow against their collateral at no additional cost to the loan interest rate.

Proposal

Vote 1: 

  • Option A: Deposit onto Vendor Finance

  • Option B: Do not deposit onto Vendor Finance

If Option A, proceed with Vote 2. If Option B, do not proceed.

Vote 2:

  • Option A: Deposit $5M on both Ethereum and Arbitrum

  • Option B: Deposit $5M on Arbitrum

Loan terms for any pools deployed onto Vendor as well as whether or not strategies should be used is to be determined through a separate voting phase conducted by the DAO.

Conclusion

This TAP represents a significant step forward in solidifying the partnership between Vendor Finance and Olympus. We have incorporated valuable feedback from community engagement to enhance what was put forth in the initial RFC to better align it with the interests of the Olympus DAO/community. 

Lastly, we want to say thank you, as we sincerely appreciate everyone who has provided feedback on our proposal, thereby actively participating in the decentralized governance process.

Best regards,
The Vendor Team

Contributors

0xTaiga
Joel_
Lorem
MaxCoins
Mcman

Temperature Check

Given the strong interest in a Clearinghouse, I believe Arbitrum is the right place for this deployment.

This would allow smaller holders access to capital on an L2.

    Don_G_Lover Yeah that's reasonable. I agree, an OHM Vendor pool on Arbitrum would give easier access to smaller players in the community 👍️

      Thank you to the Contributors, who have been quite diligent and receptive to the sometimes challenging discussions that can happen in these important proposals!

      The Proposal scheme looks good. On a personal note I think it only makes sense to deposit into Vendor Arbitrum.

      When does the Temperature Check poll end?

        USD 5m seems way too high, also considering the fact that the initially deployed $500k already account for >60% of Vendor's TVL. seems a bit risky to me.

          abipup I think there's still a good argument to deploy capital on Ethereum as well as Arbitrum even with Cooler having as high a capacity as what it seems there will be with the current voting results. Since no fees are involved it means Cooler and Vendor provide for the same needs, just using slightly different mechanisms and at the same cost (i.e. only the interest rate + gas).

          The main thing to "find out" is in regards to UI/UX, which is yet to be seen for Cooler but is proven in Vendors case. So I think having both deployments would allow users to find out which protocol they prefer from a UI/UX perspective, which is typically always overlooked and undervalued in my personal opinion.

          As for when forum voting concludes and for snapshot voting to begin this is has been left for the DAO to decide when is best for them in regards to organisation and keeping track of results etc.

            0xcrypto Thank you for bringing up a valid concern! If you look at the defi llama dashbord for Vendor you can see that at the ATH protocol held $1.8m in funds and that did not involve Olympus funds in any way. Besides that, we take several steps in order to make sure things are safe, here are just some of them:

            - We audit any code that we deploy.
            - We offer bug bounty requests and review each one carefully.
            - Lending and borrowing is isolated. Our contracts are isolated as well to an extent where each pool is a separate contract.
            - Contracts are upgradable, but only the pool owner can upgrade. So we can not upgrade Olympus pools and if something goes wrong, Olympus DAO will have the ability to do that to recover the situation if that was deemed necessary.

            Of course you can never be sure that nothing will go wrong and that is true for any smart contract. From our side we just can say we do our best, as we want to be in the industry for a long time.

                abipup Looking at the votes for this temperature check, do you think we can proceed to the snapshot?

                    The proposal contains several questionable points:

                    Firstly, Vendor's claims regarding their TVL are misleading. They've cited an ATH of $1.8m but upon closer inspection this applies to their v1, not the v2 that's the focus of this proposal. In reality, the v2 TVL is significantly lower, around $200K. So taking into account the actual numbers rather than the ones being used to sugarcoat things and downplay our risks, if we were to deposit $5m into their v2, our contribution would make up over 96% of their TVL, or +2500% of their current TVL.

                    Secondly, considering the substantial investment they're demanding from Olympus—where we have significant capital at risk and they bear no risk whatsoever—it's unclear whether they've put in enough effort to ensure funds are safe. So far, they've conducted only one audit, while Cooler is already initiating a second one. Additionally, their claim of offering bug bounty requests seems unfounded as no official or formal bug bounty program seems to even exist.

                    Their attempt to capitalize on an inflated TVL and a fictitious bug bounty program in their proposal introduces a host of uncertainties. It would be their responsibility to take these points more seriously.

                      citizen_wayne If the proposal was not for v2 but for v1 instead, would you be in favor, since it has been more battle-tested? Taking into account 0 fees? Also, at what capital allocation would you feel comfortable, $500k was borrowed very fast…

                      That is hypothetical of course, just trying to gage your thoughts on Vendor overall.

                      Also, Vendor v1 was audited by a Olympus Incubator preferred auditor!

                      Cooler has not even been seen nor tested, has 0 TVL! Both our v1 and v2 are in the wild. You seem to be over the moon about cooler passing? So, I am confused 😐

                        citizen_wayne In regards to the first point, I don't recall ever claiming that v2 had 1.8m in TVL and apologize if there was any confusion, but the point is: we have managed large amounts of TVL without the presence of Olympus. Additionally, both the v1 and v2 contracts share similar logic - as v2 is largely a more robust version of v1. Considering that both v1 and v2 are audited I can not agree that we downplay anything here. We have also previously received bug reports, which fortunately did not survive any POC test. Had they confirmed any bugs however, we would have been happy to payout. Furthermore, v1 of the protocol is still supported, which the Olympus community is more than welcome to push towards if that makes them more comfortable. So far however, no one has leaned in that direction.

                        Secondly

                        citizen_wayne considering the substantial investment they're demanding from Olympus

                        Vendor is not demanding anything. We have submitted two temperature check proposals for consideration by the community. The community/DAO has then had the opportunity to engage in discussions and collectively determine if the terms in the proposals should move forward. This can be seen through a temperature check vote (found within both proposals). If there is predominantly positive support then a finalized snapshot proposal assembled by the DAO is released, where Ohmies can exercise their governance power by voting on the snapshot. Thanks for your concern

                            0xTaiga We need to decide parameters on the following:

                            • Lend Ratio
                            • Due date
                            • Term rate type
                            • Term rate
                            • Strategy

                            Can Vendor team provide some guidance on these terms?

                                I think it's ok to move the first two votes outlined here to snapshot, they're the most important ones.

                                abipup The idea was to follow the terms that would be accepted by the community on the cooler loan votes. Since we do not charge additional fees, we should be able to match them close. The main difference would be an amount: that would be the second vote in this case. In terms of strategy that would depend on whether you guys have bridged USDC or new native Arbitrum USDC.

                                Thanks for checking in with us, and please let me know if there is anything we can do to help with snapshot vote.

                                    I don't see the need for two votes, just have the terms as laid out in Cooler (if you have no other requests there) and add the following options:

                                    1. Deposit $5M on both Ethereum and Arbitrum
                                    2. Deposit $5M on Arbitrum
                                    3. Don't deposit into Vendor Finance

                                    Also, option (1) is still $5m combined, correct?

                                      shadow Yes good point, that's more streamlined. Based on the feedback we've gotten so far and the interest we've seen for Cooler loans on Mainnet, we feel that it may be a conflict of interest for us to also launch on Mainnet. So we've chosen to reduce the vote to two simple options:

                                      • $5 million on Arbitrum
                                      • No deposit into Vendor

                                      This will give access to smaller Olympus token holders and allow them to participate in borrowing/lending on a cheaper chain. It will also allow users to choose which platform fits their needs more

                                        0xTaiga Okay no problem, i was just confused because the Vendor frontend doesn't look like it supports setting up a specific Loan Amount (2850 DAI per gOHM, for example), just 25/50/75%. But if that can be configured in the backend then it's ok with me.

                                        Since Snapshot is having issues today I would like to wait until we get official word from them that it's resolved to post. Idk if making a snapshot now would work after whatever fix they make, for example.

                                            abipup You can actually type them in manually on UI as well🙂

                                            (https://ibb.co/ph1BvcR)

                                            I have tried to add an image but it does not render here. You can just simply click on the number in Create Pool widget to type it in manually.

                                              0xTaiga hi taiga, could you please point me towards your bug bounty program? thanks

                                                  0xcrypto We have always maintained the "Report A bug" section in the top bar menu of our V1 site (which is still there). Additionally, we are currently in the process of migrating it to the V2 UI (it is now live on the menu bar of V2).

                                                  Our current treasury constraints require us to exercise caution, so as a result, we work closely with bounty hunters on a case-by-case basis when determining payout amounts. We appreciate every report we receive and thoroughly review each one. We are fully committed to rewarding any legitimate findings that contribute to the security and stability of our platform.