• Proposal

  • OIP-44 Implement Lobis as a governance arm of OlympusDAO

Jawesome I think bootstrapping the liquidity is fairly low-risk with using OHM from the DAO funds. For some context, $5m in OHM (~5.7k OHM) represents 0.6% of the DAO treasury funds and our daily inflow of OHM is roughly 4.5k OHM. Bootstrapping liquidity early will allow us to earn trading fees and be in a position to gain upside exposure to the price of LOBI should it take off. By implementing the rev share natively in their bond contracts, Lobis is essentially using Olympus Pro.

As to the 1.1% fee, this number alone would put Olympus as a top 20 holder of LOBI baselining against our DAO fees and holders. Once you add in the initial supply allocation and ability to bond that liquidity back to Lobis at a discount, I think that Olympus will be positioned to be the largest holder of LOBI.

      Is there something that sets Lobis apart to request different conditions than Olympus Pro customers? Else I would see other protocols incentivized go the same route and do an OIP instead of applying for Olympus Pro.

        Alice_und_Bob

        Hey Alice,

        the value added by Lobis to Olympus is way higher than just a simple Olympus pro partnership. In addition to Olympus DAO fees, Lobis will use bonding to massively accumulate OHM (creating demand for OHM and lowering sOHM supply, hence having a positive impact on APY). In addition to this, it will airdrop the community some LOBI at launch (haven't heard of any Olympus Pro user doing this yet, but let us know if we are mistaken). It will allow Olympus to have some governance power over Lobis, which will enable Olympus to push their useful gauges on Curve, Frax and Convex to maximise returns on treasury asset.

        Finally, as your comments is oriented toward the 1.1% fee, please note that Lobis will be ran autonomously, with no management or monitoring from Olympus pro team. Although the Olympus core team will advise on the execution of the project, all the heavy lifting (which is still significant as bonding volatile assets for reserve building is quite different from bonding USD stable coins) will be done by the Lobis team. It's only fair that the fee would not be the same as the basic Olympus pro offer where the Olympus pro team does everything and partners just need to wait and see their liquidity beautifully increase 😊

        This Olympus DAO fee still positions Lobis as an Olympus Pro user (simply a different scope than what already exists).

          Jawesome

          The two points you are mentioning were strong suggestions from the Olympus community. The upper limit of $5m was also a requirement from Olympus. The proposal here has been designed to find the most suitable partnership in order to seal a long term alignement of interests between the two protocols, and to ensure a successful launch.

          The risk free loan is not costing anything to Olympus, and the position will be unwinded through taking part in bonds as suggested by Tex in the governance discussion, which corresponds to a favourable token swap for Olympus. It will also help generating revenues and excess reserves for OHM with the OHM held in treasury. USD 5m is a rather small amount compared to the >900k OHM held by the treasury, but if the Olympus community feels it is too large, we can definitely consider reducing this. Finally,

          Regarding the 1.1% fee, it's not so low actually (no design, management or maintenance needed from Olympus), and it is not risky at all for Olympus as it is free (no OHM minted against this fee, pure revenue to the excess reserves). The LOBI token will give access to governance rights on CRV, FXS and many others in the future, so in terms of governance power, it will be interesting for Olympus DAO to hold this token and participate in governance. You also need to look at the full picture here. Lobis will accumulate OHM through liquidity bondings, creating a new use case for OHM and having a positive impact on sOHM's APY. Lobis will accumulate way more OHM than any protocol offering OHM reserve bonds as we have seen with the Olympus example that LP tokens accumulated through liquidity bonds accounts for the vast majority of reserves. It also shows the world that pairing with OHM works.

          Finally, it sounds from your questions that you are very bearish on accumulating CRV, FXS, or any governance tokens. Of course this is a partnership, and the first question one should ask themselves when considering this proposal is indeed: "does it make sense to create a governance focused vertical". Once this question is solved, the other questions around the risk of launching a new token, or the appetite to accumulate underlying tokens rather than LOBI tokens become irrelevant.

          We hope this answers your concerns!

            Great project, with strong vision. Finally a way to tackle the problem of the elephant in the room which is Convex (great project btw, but DeFi is no place for hostile takeovers).

            Glad to see a project forking Olympus code to actually build some value for the ecosystem, like Klima!

            Will definitely vote for.

            I don't understand. We already have our governance token. OHM itself gives us voting power.

            It may be that our governance mechanisms could use improvement, but do we really want to cede complete control to an external project AND pay them a percentage of our bond revenue? For what?

            LobisFinance

            I feel like this was added to Snapshot far too quickly, before there was sufficient time given to the forum for discussion.

            If this was discussed more in Discord, you leave people like me who have far better things to do all day than chat in Discord out of the conversation.

              Alice_und_Bob

              I fully agree.

              This seems like something we don't need at all. It feels like an external attempt to infiltrate the Olympus project itself.

                  gnostication Hey,

                  It seems there's a little confusion here, Lobis isn't built to provide or replace any part of OlympusDAO that exists today. Lobis does not provide a governance platform/token for Olympus itself or replace OHM in any way whatsoever. No percentage of bond revenue is being requested from any of the bonds Olympus offers, nor is this even considered.

                  Outside of OlympusDAO within the broader DeFi ecosystem, the currently popular mechanic's of 'flywheel' tokenomics and not so popular 'Mochi' tokenomics create increased risks for community members and create centralisation within DeFi.

                  Lobis utilises the bonding mechanism to accumulate governance tokens in other DAO's such as CRV for Curve and FXS for Frax. This enables Lobis to participate in the governance of those protocols and lobby them to provide different mechanics that enable users to retain their voting rights and create attractive offerings for users. All these will be paired with OHM to increase the use of OHM as the base pair for other major DeFi assets. Lobis is also providing a significant governing share to OlympusDAO as we want to encourage cross-community governance with the OHMies.

                  The main request on this proposal is that OlympusDAO pair the Lobi tokens rented out at 0% to Olympus with OHM and provide liquidity (earning the DAO fees). The risk-free loan is not costing anything to Olympus, and the position will be unwinded through taking part in bonds as suggested by Tex in the governance discussion, which corresponds to a favourable token swap for Olympus. It will also help generate revenues and excess reserves for OHM with the OHM held in treasury. 

                  Lobis will accumulate OHM through liquidity bondings, creating a new use case for OHM and having a positive impact on sOHM's APY. Lobis will accumulate way more OHM than any protocol offering OHM reserve bonds as we have seen with the Olympus example that LP tokens accumulated through liquidity bonds account for the vast majority of reserves. It also shows the world that pairing with OHM works.

                      I can clearly see some innovations and potential in here, still wondering what % of LOBI total supply will Olympus have at the end through the proposed mechanism.

                      LobisFinance

                      Since this is very high finance, I certainly could misunderstand.

                      Are you essentially describing lending governance tokens from other DAOs to the Olympus DAO at 0% interest? What's in it for Lobis?

                      If I understand correctly, Lobis already holds (or plans to hold) OHM, which would in itself give Lobis a governance stake in Olympus DAO. On its face, swap sounds fair (or even weighted toward Olympus benefit). I'm trying to figure out how Lobis (or the other projects) will benefit more than a simple bond or purchase of OHM.

                      Will Lobis (or the other projects) get discounted OHM? Will Olympus DAO get discounted governance tokens from other DAOs?

                      My skepticism is this effectively sounds like a limited merger operation, which may impact the sovereignty of the DAO.

                      As I understand it, the Lobis project's intent is to help alleviate presumed risk from DAO "isolation". The approach, however, sounds to be dilution.

                      If I am correct, Olympus 2.0 will fully and directly decentralize treasury control. Dilution of governance before that upgrade happens may also introduce complexity that could have unforeseen consequences and/or security risks. I'm not so sure the "Mochi" economics you describe apply to the rather healthy Olympus DAO, especially if you consider the improvements forthcoming with Olympus 2.0.

                      Also, I think the phrase "centralization within defi" is an oxymoron.

                          gnostication

                          A few points to answer you as clearly as possible.

                          1/ What's in it for Olympus:

                          • OHM is backed by assets with a risk free value, and aims to be a very solid currency. It is not designed to increase its total supply against volatile assets that can go to 0 in case of a black swan event. Lobis would be solely focused on this kind of assets, enabling Olympus to get exposure to this governance opportunity
                          • Olympus will receive steady share of Lobis' bonding revenues, increasing its reserves with no OHM emissions: basically Lobis will be an Olympus Pro user.
                          • Olympus will receive an allocation of LOBI tokens at launch which it will pair with OHM to seed liquidity. It will bond it back to Lobis which corresponds to a token swap with a 50%+ discount in favour of Olympus
                          • Active Olympus community members will receive an airdrop of LOBI tokens, to bind the communities from the start.

                          2/ What's in it for Lobis:

                          • Extremely valuable advices and support from Olympus DAO on the way to run a bonding/staking model similar to Olympus', and the settings of parameters, calculation of excess reserves, etc.
                          • Support from the Olympus community which is truly amazing
                          • Not using Olympus' brilliant code without the courtesy of asking what the community thinks of it
                          • The opportunity to be part of something bigger: the alliance of the decentralised reserve and the decentralised regulator

                          3/ Centralisation is the worst thing that could happen to DeFi. Calling it DeFi is not sufficient to ensure decentralisation, you need to fight for it.

                              LobisFinance

                              I think I may understand better. How is what you propose different than simply participating in Olympus Pro?

                              (Please note: the title of this OIP is "Implement Lobis as a governance arm of OlympusDAO." The title reads like Lobis is trying to take a chunk of OlympusDAO governance, which is the perspective I took when I reviewed everything written. Instead, the way you describe it sounds just like you want to participate in the bond program/protocol.)

                                Olympus Pro in its current state is a way for protocols to benefit from Olympus' bonding contract and experience in managing those contracts to acquire liquidity (or other tokens) against their native token. Client don't have to do anything but send tokens to Olympus. Everything is managed by Olympus. Generaly, the tokenomics of client protocols are not designed just for the purpose of bonding.
                                In the case of Lobis, it is not only the bonding contracts that are necessary, but also the staking one (the full architecture basically). So Olympus Pro as it stands right now is not sufficient enough to offer this. It also needs a dedicated token. Finally, it won't take any time to Olympus team as it will be fully managed by a separate team.

                                All of this explains why Lobis cannot fall exactly under the current form of Olympus Pro and needs a tailored agreement.

                                  Thanks Lobis team for writing this proposal! More utility and integrations with protocols are generally good, and I like the core vision of Lobis.

                                  However, the is one big questions I'd like to have seen resolved before going to snapshot vote.

                                  Olympus DAO providing the initial OHM in the OHM-LOBI pair is basically giving all early holders of LOBI and airdrop recipients up to $5M in early exit liquidity. I think this needs to be adressed and discussed. E.g. can you please be public with the full LOBI token distribution and lockups? And what are the requirements (if any) on airdrop receivers?

                                  LobisFinance

                                  "Active Olympus community members will receive an airdrop of LOBI tokens, to bind the communities from the start."

                                  Editing based on the last response from @exaltedemissary in the olympus #policy channel, wanted to leave this question here instead for broader visibility,

                                  How are you planning to involve sOHM, wsOHM ohmies in the snapshot voting process?

                                  There are great many community votes in this bucket.

                                    tex

                                    Has Olympus also considered doing a DAO-to-DAO swap with Lobis? Bootstrapping the liquidity is one element of the equation and very much a positive for Lobis but, presumably, if Lobis is going to be backed by OHM (or gOHM), it will need OHM in its treasury to have any sort of runway at launch. Without significant runway at launch, I would assume Lobis will need to be conservative on how it bonds CRV, FXS or any other governance token because these bonds will not contribute to runway for the project.

                                    By doing a DAO-to-DAO swap at the outset at whatever Lobis's internal backing rate is (1 LOBI per OHM, 100 LOBI per OHM, etc.), Olympus can take an immediate stake in Lobis. Assuming Lobis can defend the backing because it will have enough OHM in its treasury for all circulating LOBI, then this is a (mostly) risk-free +EV investment for Olympus since its OHM will stay locked in the Lobis treasury and LOBI will be trading at a multiple of its backing anyway (assuming successful launch).

                                    Without the DAO-to-DAO swap, I would imagine the process of actually accumulating non-OHM governance tokens will be slow and deliberate--the same way OHM had to be slow and deliberate about accumulating non-stablecoin assets.

                                    EDIT: By the way, this is the same issue for [Redacted].

                                        We just had a good discussion in the Olympus Discord/policy channel regarding this proposal. Let me just reiterate what I mentioned there…

                                        This vote could end up being a vote for war…or could be a vote for a common ground and understanding between the existing powers on how to regulate ourselves in a fair manner…

                                        The approach of LOBIS and other Governance DAOs will dictate this outcome… and I believe before asking for a vote from many of us who are not privy to all the power struggles that take place and the discussions behind the scenes, you all need to align and agree… last thing we need is for Ohmies to vote in a certain way that would pit us against each other and divide this space…