One critical caveat to consider here:
gOHM captures staking yield via its price in the gOHM:sOHM pair. As a result gOHM's price in an external reference asset such as DAI, is comprised of two components:
- The value of OHM (and thus sOHM) in DAI
- Staking yield - as long as staking returns exist, there will be constant upwards pressure on gOHM's price relative to sOHM/OHM (and thus relative to DAI).
Using gOHM in a product like BBSA would mean that, were you in the senior tranche, you'd be foregoing most of the staking yield.
I don't know if it's possible with something like Smart Alpha, but the ideal product, at least for me, would be something that allowed me to hedge against price action due to item (1) (i.e. the OHM/DAI price falling) while retaining full exposure to price action (which would only ever be positive) from staking yield.
A key question to consider: Would it be possible to have some kind of special-case Smart Alpha pool that accepted gOHM deposits, but used an OHM/DAI (as opposed to gOHM/DAI) price oracle to determine the respective movements of each tranche. Perhaps the idea of a market-cap based pool raised earlier in this thread could achieve this?
Even if the above is possible, it raises another question: Would people still be interested in the junior tranche if it did not receive staking yields? I imagine it would mainly be of interest to those who are not interested in holding OHM long term and wish to profit (with leverage) on short term price action.
In my mind, as a long-term sOHM/gOHM holder, the ideal hedging product for me would be something that allowed me to retain full (or at least most) of the staking APY while giving up all potential price upside (and downside); i.e. becoming delta neutral. This hedged product (that retains staking APY, but is delta neutral on the underlying OHM price) would be tokenised itself so it could be used as collateral in other platforms.
Conceptually, you could achieve the first part of this (but sadly, not the latter - being tokenised) by shorting an equivalent amount of OHM to what's contained within your long gOHM position, or by buying OHM put options on some defi options platform. In reality, neither is possible at the moment; the former because no one would be willing to lend OHM for anything less than staking APY due to the opportunity cost, the latter because none of the existing defi options platforms offer contracts for OHM at present. Options would also have the complexity of being an expiring product that you'd need to continually roll-over (i.e. need active management).