• General

  • Introducing Lobis, the governance arm of Olympus DAO

Summary:

Decentralized Finance faces a centralization issue.

Although innovative and highly efficient, protocols and mechanisms such as bribes, Flywheel locking tokenomics, and gauge voting have led us back down the path towards centralization.

When the richest users hold all the power, these protocols do not belong to the people.

Lobis is here to change that.

A basket of governance tokens backs the Lobis token, with the project leveraging knowledge and experience from OlympusDAO. By teaming up together, we designed a form of the Olympus bonding mechanism to fight back against this wave of dangerous centralization and propagate the use of OHM as DeFi's global reserve currency.

Lobis itself does not lock any tokens but instead delegates them according to governance. In this way, we take power from the whales and return it to the community.

We do not need VCs to back us; we did not raise, there is no team allocation, there is only Lobis, OHM, and the community.

Why Lobis?
Together with the OHMies, we aim to bring decentralization back to DeFi by backing the vision of OHM as a decentralized reserve currency and providing a solution to the issue of whales gaining control over other protocols due to imbalances in financial wealth.

By supporting our proposal, you will help to:

  • Position OHM to become the most widely used currency in DeFi by becoming the base pair for governance tokens such as CRV, FXS, oSushi, and more.

  • Generate fees for Olympus DAO and provide liquidity through direct integration into OHMieSwap.

  • Generate income for the Olympus Treasury in the form of governance tokens with every bond.

  • Increase Olympus Treasury directly by way of interest-free lending to Olympus of our governance token - LOBI.

  • Trigger an Airdrop to the Olympus community in the form of LOBI.

  • Leverage locks and boosts to generate the best yield on Olympus’ treasury assets.

  • Achieve significant exposure and governance over the entire DeFi ecosystem.

  • Enable projects that implement a Curve style locking mechanism to become more decentralized, reducing the existential risk of decision-making bottlenecks.

Protocols fighting against centralization

One year ago, Curve revolutionized DeFi with their veCRV tokenomics, which enabled a fast and efficient decentralization of the Curve DAO.

The high inflation of CRV was efficiently offset by providing benefits to token holders who chose to lock their tokens long-term.

These tokenomics have worked so well that more CRV is locked than are minted each day when writing, effectively turning this once inflationary asset into a deflationary one. (3,3)

However, protocols such as Yearn, Stake DAO, and Convex have since circumvented these tokenomics by building strategies that lock CRV to enable their users to attain boosted returns without individually locking CRV.

Despite having good intentions of providing high yield for their users, this protocol versus protocol situation has encouraged the centralization of some of DeFi's most significant projects.

The Curve Wars are well documented, but until now, nobody has offered a solution.

Why Lobis?

DeFi has no time for internal power struggles. Regulation and centralization belong to Traditional Finance, and we must not return to those old ways.

Once proven, the Lobis mechanism will enable other protocols to become more decentralized and protected from the dangers of regulation that apply to centralized entities.

Lobis enables projects to protect their decentralization utilizing locking mechanisms while ensuring that users can participate in governance and propagating the use of OHM as DeFi’s global reserve currency.

Lobis and Olympus DAO work together by creating a virtuous circle between users providing liquidity and protocols creating value. Thanks to Olympus’ technology, Lobis will accumulate lockable governance tokens and therefore protect the underlying protocols.

Lobis is here to ensure a fair market and thus is independent and protocol agnostic.

By combining delegation, locking, and holding, Lobis, and OHM can use boost/liquidity-as-a-service offers while maintaining governance rights. It will allocate its governance tokens to different protocols allowing an optimized locking with a fair approach and ensuring decentralized governance.  The Lobis community will use this power to weigh on key governance questions when protocols need their help.

Lobis will be a governance guardian of DeFi, with the power to protect protocols from centralization and make OHM the reserve currency for DeFi.

How will Lobis achieve its purpose?

Lobis will create a reserve of governance tokens from protocols using Curve-like tokenomics by offering bonds to fulfill its purpose. The first tokens included in this reserve are CRV and FXS, with AAVE, Sushi, and others to follow.

In parallel, the LOBI (Lobis’ governance token) will be paired with OHM on Sushiswap, and liquidity bonds will quickly acquire liquidity bonds to create deep liquidity.

Similar to Olympus v1, users can also stake their LOBI and receive sLOBI.

When a bond enables to increase the reserves of the DAO, a new LOBI is minted and distributed to sLOBI holders. The minting rate is 1 LOBI for each $1 worth of governance token or LP token bonded. The contracts use Chainlink price feeds to calculate the amount to be minted.

At first, Lobis will accumulate CRV and FXS and lobby to incentivize whitelisted protocols to move towards fairer, more governance-friendly locking mechanisms (today, neither Yearn, Convex, nor Stake DAO allows CRV stakers to keep their Curve governance rights).

As part of this goal, Lobis will offer bonds for CRV and FXS, with AAVE, Sushi and others set to follow.

Once those whitelisted protocols have implemented a viable solution, Lobis will support them by fairly allocating its reserve governance tokens and acquiring liquidity bonds to support the peg of their wrapped tokens.

When more protocols implement Curve-like tokenomics, Lobis should naturally accept to launch reserve bonds with their governance tokens, but ultimately, the community will determine the next steps.

What’s in it for the OHMies?

Lobis focuses on governance and propagating OHM as a currency, while Olympus will accumulate LOBI tokens without further emission of OHM, increasing its backing.

Lobis will also enable Olympus to get access to the best yields in DeFi for its treasury assets and potentially gain the ability to participate in the governance of the ecosystem.

The Olympus team has guided Lobis with their experience and expertise in design to support the project’s launch. The project team will build and maintain Lobis under the stewardship of the OHM team and plans to integrate the OHMies as well.

Thus, Lobis is inexorably linked to Olympus by code, ethos, and long-term vision. This is not possible without the support of the OHMies, and to that end, we present the critical benefits to (3,3):

  • Facilitating the use of OHM as the sole global reserve currency of DeFi by pairing governance tokens with OHM for its liquidity. Lobis will acquire a considerable amount of OHM through liquidity bonds with a positive impact on sOHM APY.

  • The OHM community and treasury will get access to the best yields available in DeFi for their treasury assets through the governance rights on Lobis (on Curve, Frax, and in the future Sushi and others). If required, we will also bootstrap the acquisition of CVX for OHM per the most recent governance proposal so that Olympus can get governance power over Convex without harming its backing per token/RFV.

  • We will directly contribute income for OHM via Lobis bonds, with the Olympus’ treasury set to receive 1.1% (1,1) fee for every reserve or liquidity bond sold by the DAO.

  • We will become active participants in the governance of Curve, Frax, SushiSwap, and other relevant protocols.

  • The Olympus community will receive an airdrop at Lobis’ launch to bind together the communities.

  • Lobis will lend LOBI tokens with a 0% interest rate to Olympus, and Olympus will pair them with treasury OHM to provide liquidity on Sushi and Ohmieswap.

This collaboration will be mutually beneficial for Lobis and Olympus. The two protocols are complementary, with Olympus focused on building the sole decentralized reserve currency and Lobis, the decentralized governance regulator. Together, our two DAOs will provide the infrastructure of a fair decentralized financial system.

Who is the team behind Lobis?

Our team has a long track record of launching and maintaining projects in the ecosystem such as Curve, Aave, Frax, Stake DAO, and crafted Lobis under the stewardship of OlympusDAO core members.

We are a group of builders under the stewardship of OlympusDAO core team members united by a passion for maintaining decentralization within the DeFi ecosystem. We invite you to join us and help shape the future of this proposed governance arm of OlympusDAO.

In decentralization, we trust.

    Hello and thanks for this very interesting proposal. I have a lot of thoughts, but I was wondering if you could clarify this part:

    Lobis itself does not lock any tokens, but instead delegates them according to governance.

    Can you explain some of the mechanics of how this would work?

      LOBIS
      [REDACTED]
      CVX Bonds

      Another arm for Olympus to acquire governance power, lets go for it!

      Amazing idea! Love the spirit, totally fits Olympus' DNA!

      Convex is really an amazing project which succeeded due to its great execution, but its true that the wrapping of CRV governance rights inside CVX raises key philosophical concerns… Only the beginning of the challenges DeFi will have to face in the future, but wagmi!

      This will be huge for Olympus. There is a lot of potential and synergy here, especially when you put the relationship between OHM and LOBI at the center. I'm for it.

      irc

      Hey, excellent question!

      Basically, when a protocol locks the governance tokens it holds (here CRV and FXS), it becomes the one voter for the next four years (for both Frax and Curve), and even more if tokens are automatically relocked. If Lobis DAO was to lock all tokens it accumulates, it would become itself a vector of centralisation, which is the opposit of the vision.

      Lobis instead aims to use its potentially large governance power to propose whitelisted lockers towards a fairer system, where the user locking its governance token can keep its governance right.

      How Lobis allocates the accumulated governance tokens between whitelisted protocols will be decided through governance.

        Maybe a very practical question on the Curve/Convex side of things. There are currently only 3 protocols/smart contracts that are whitelisted to interact with CRV (Convex, StakeDAO, Yearn). Many others have tried and failed and from the latest discussions in their forum there seems to be little appetite to change things. This is why most protocols focus on acquiring CVX rather than CRV because with the former they can influence the gauge votes of the latter.

        What makes you think you will be able to get whitelisted for Curve? Especially considering the fact that most of the veCRV in existence is owned by Convex (>40%) and I think this will be a very tough sell to them. Again, there have been many protocols who've tried but failed to get the whitelist. So you can acquire CRV as a protocol but you will have no guarantee that you will be able to actually do anything with it.

        I'm not opposed to the general outline that you've written here, but I think that there are a lot of practical concerns when it comes to Curve that are not tackled in this proposal. Finally, also worth noting that [REDACTED] is pursuing very similar things for Curve/Convex, albeit with an initial focus on CVX and LP tokens.

          Trying to sum up the general approach below for confirmation:

          • Users deposit CRV, FXS… (whatever token LOBI is interested in)

          • Users receive in exchange LP OHM-LOBI tokens (or LOBI tokens?)

          • LOBI tokens are minted to acquire the necessary OHM token amount from the OHM Treasury to create these LP tokens. These LOBI are then added to the OHM reserve.

          • If there is any residual value during this process, new LOBI tokens are minted and sLOBI stakers receive them (1 per 1$ increase of the LOBI treasury)

          • Also LOBI is lending tokens to OHM at 0% in order to bootstrap liquidity

          All of this enables:

          • Lobis to increase its reserve and to distribute LOBI tokens to users based on their CRV, FXS… deposits
          • OHM is getting 1.1% fee on each bond and find a new vector of liquidity.
          • OHM continue to expand its user basis
          • OHM is getting LOBI tokens without new emission of OHM tokens (using its reserve) and manage to get a voice in different protocols starting with Curve and Frax.

          Am I right with the above?

            0xFelix
            Hey 0xFelix!
            You exactly have the point: Lobis does not intend to lock its CRV so no need to be whitelisted. Actually, if the idea was to be whitelisted, then it would make Lobis a new centralisation threat for Curve, or Frax. This is the main difference with [Redacted] (not sure how they plan to get whitelisted though, interesting question).

            Instead, Lobis will influence whitelisted protocols so that they can change their current locking mechanism (cvxcrv for convex, PPS for Stake DAO, etc…) toward a system where the user keeps its governance right and just benefits from 1/ the value it brings to other users (boost) and 2/ liquidity on its token (not locked for 4 years).
            Once a solution has been implemented by one or several of those three whitelisted protocols, then Lobis will be able to stake its CRV tokens on their platform, and start actively participating in governance.

            Lobis does not aim to make LOBI a more efficient wrapper of CRV. The current problem with convex, is that to vote on Curve it's more efficient to buy CVX than CRV. We don't want this to happen with LOBI.

                Matthias

                Hey Matthias,

                Lobis is a fork of Olympus focused on governance, and with a special link to Olympus DAO. Therefore, the mechanics are the same.

                • Reserve bonds: user deposits CRV, FXS, etc. and receives LOBI in exchange.
                • Liquidity bonds: user deposits LOBI/FXS LP tokens and receives LOBI in exchange.
                • The excess reserves built through those bond sales enable to mint new LOBI which are given to users staking (sLOBI owners).
                • In the medium term, reserve tokens will generate revenue and increase the excess reserves.

                Links between Lobis DAO and Olympus DAO:

                • Olympus will receive 1.1% fee on all bonds (so accumulates LOBI without emission of new OHM and will be able to participate in Lobis' governance);
                • Olympus continue expanding its user base
                • Olympus community receives an airdrop
                • Lobis will accumulate OHM through the accumulation of OHM/LOBI LP tokens thanks to liquidity bonds
                • At the launch of project, Lobis will lend LOBI tokens to Olympus which will pair them with its reserve's OHM and enable the bootstraping of the liquidity

                Does this make sense?

                    LobisFinance

                    Thanks it perfectly makes sense. So the accumulation of LOBI tokens comes from the 1.1% fee + the initial airdrop. I thought there were maybe another mechanism.

                    Very interesting idea. So overall you want to push these platforms to massively increase liquidity between locked CRV and CRV by staking your CRV on them.

                        LobisFinance Okay thanks for the explanation. Let me just comment on this part: "Lobis will influence whitelisted protocols so that they can change their current locking mechanism". I have to say, as someone who has been actively following the Curve and Convex ecosystems for months, that I find this plan to be based on a large amount of hope but with little chance of actually changing things. Apologies if that sounds a bit harsh, but at least for Convex (which is the biggest party you would need to convince since they control >40% of veCRV) this will simply never happen. If they would change the method of locking CRV, the CVX token would lose all its power (since the value is based on the veCRV power it holds). Not to mention that their contracts are not upgradable as far as I know, so it would require a full migration. I cannot imagine a scenario in which they would agree to this. Also, the CVX token itself already solves the issue of the 4 year lock of veCRV (down to 16 weeks for vlCVX).

                        The same probably goes for Yearn since you exchange your CRV voting power for a liquid wrapper that earns interest. Why would they give up on that? StakeDAO I'm less familiar with so I won't comment on that.

                        Again, I'm not trying to totally shoot down this idea, and it might work for other governance tokens, but for CRV I think this will be very tough to implement because the incumbents have a huge amount of power and you're basically expecting them to change their tokenomics and do a full migration.

                            0xFelix

                            You totally get it. There are two missions: create a fairer staking mechanisms for users where they don't need to lose their token and fight for the decentralisation of the protocol which is currently in danger with Convex having >40% voting right. If the plan was to primarily give every CRV to Convex, this purpose would not be filled and we would just be an accomplice of this centralisation.

                            Convex at first will have no interest of changing the current system, true: they are close to succeed in taking over Curve. But think about Yearn and Stake DAO which are hardly locking any CRV anymore, have a broken peg for yCRV and sdveCRV, and have nothing to lose in finding a new way to come back into the fight. This is not hypothetical at all, and it's higly likely they are currently working on a solution for a more attractive mechanism.

                            Once Lobis has accumulated a lot of CRV (targetting as many as Convex), it's very likely that common grounds can be found with whitelisted protocols to move the market in favor of users. The day this happen, Convex won't be long to follow. Again, kind of a game theory here!

                              0xFelix you raise some valid points but no good things are easy. If you think about how it seems now, imagine how it will be if we continue down this route…

                              There's also many different ways to go about it, it's not necessary to force them to deploy new contracts, Lobis can also work with them to implement a stronger peg or other incentives (as decided by the community) for the protocols that work against centralisation.

                                I think that this proposal offers a really interesting mechanism to be able to influence the Curve ecosystem in a way that would hedge our bets on Convex. The mechanism design is particularly compelling given the liquidity built on OHM and the bond rev share. By allocating a portion of the initial supply at 0% for Olympus to provide liquidity, this will enable us to own more liquidity for OHM as well as gain trading fees on the OHM-LOBI pair.

                                One of the interesting things that we could do with this liquidity when Lobis enables OHM-LOBI bonding is return that liquidity to Lobis and help maintain their liquidity bond discount. By comparing the current DAO treasury (915k OHM) vs. top holders of OHM, a 1.1% rev share (~10k OHM) would put us into the top 20 holders of LOBI by default, even before considering the LOBI gained from initial allocation, liquidity provision, and bonding.

                                It seems that Curve is in need of a solution that helps decentralize the concentration of voting power and Lobis seems to be fit the bill. I think that the design emphasizes a fair launch and considers benefits to the Olympus community. All for this proposal!

                                  LobisFinance @ This is a great proposal and we'd strongly support it at FRAX. Everyone already knows we are the largest protocol holders of OHM and proud to have been staking since June. This is another great idea and we can give our support at FRAX too both in terms of integrating it in our ecosystem but also creating FXS rewarded gauges for any pairs that have FXS or FRAX (or the wrapped veFXS token) of Lobis. Exciting times! This is definitely the right time & place for this idea and all 3 of us to work together to promote it imo.

                                    Matthias this could be one route yes, we're also really keen to see what ideas the community(s) extend that could be beneficial to the decentralization of the Pillars of DeFi (Curve, AAVE, SushiSwap)

                                      tex

                                      Thanks, Tex. We appreciate your thoughts here and building the liquidity on OHM with the bond rev share is intended to do exactly that.

                                      Your idea of helping to maintain liquidity bond discount is most welcome and would certainly help to support Lobis.