• General
  • Request for Comment: Stake 5% of Olympus DAO’s Eth reserves in Rocket Pool

This sounds like a good idea to me! Refresh my memory though, are we currently doing anything with our ETH at all?

Well written proposal and I really like how you highlight risks and a risk management strategy (staggered deposits). I hope others learn and get inspired by this. Risk analysis should be part of all proposals.

Even if initial risk might be fairly high, depositing and battle testing the system are lowering the long term risk for us and others.

Great proposal! I believe a formal risk assessment will need to be completed by the Treasury team, but the methodology listed looks great.

Looking forward to this being the first foray into staking for ETH2.

I think this is an excellent idea, I've been watching the project and been active in their discord for a good while now and they really are an amazingly capable team.

since the DAO would be holding a sizable amount of ETH and rETH indefinitely, would there be any downside to the DAO providing liquidity on a ETH/rETH pair?

    Noobulon That would be great! Liquidity is one of the biggest things Rocket Pool needs right now, especially on L2s.

    How do treasury allocations work mechanically with OlympusDAO? I'm hesitant to get too deep in the weeds of liquidity proposals, purely because of ignorance on my part of how feasible it is. But Rocket Pool has uni v3 eth/rEth pools on L1, optimism, and arbitrum, and liquidity added to any of those would be extremely valuable.

      letters in this context the liquidity owned is treated as a producing asset, the rationale being that if ETH is safe enough for the DAO to hold, and rETH is safe enough for the DAO to hold, that holding a position in the liquidity pool should also be safe and would provide additional revenue. I think this would be separate from either the "DAO owned liquidity" and Olympus pro as the pair really has nothing to do with Olympus and isnt the result of a partnership

      This might also be worthy of its own oip

        Noobulon This might also be worthy of its own oip

        Yeah, maybe this is the right approach. Get consensus on holding rEth at all, separately from any attempts to do anything with it. Based on looking through other policies, it seems like something like that might not be so straightforward - only some platforms are whitelisted for that kind of deployment, etc. Sushiswap is approved, but i don't think sushiswap's pair algorithm is great for eth/rEth. A uniswap v3 position could work, but uniswap v3 isn't whitelisted. rEth doesn't have a curve pool yet, although it sounds like they want one - but that isn't whitelisted either. So it will take some planning.

        All that said, if it happened eventually I'm sure a lot of people would be thrilled.

        This seems like a sensible proposal, with limited to no downside. Ppl smarter than me should discuss whether 5% (or more in the future) makes sense or if it should be a different percentage. Voting in favor.

        letters My concern is this; We are wanting to add 5% of the ETH we hold to be put into a project that as you say is having issues with their own liquidity issues. Why would we throw cash into something that has not been able to acquire other liquidity?

        Not taking a jab at you but out of the comments that one stuck out. I have no issue voting to allow money to go into income producing endeavors, but how would we know it is a lack of liquidity that is keeping rocketpool's useage rates down vs people just have better options to do the same.

        I would just hate to see us throwing good money after bad.

          millunare no hard feelings, that's a totally fair question, and worthy of your concern. Your comment makes it sound like you're worried that low liquidity is a reflection of poor confidence in the project, and I can say for sure that that isn't the case. The reason for low liquidity is simple -- it's addressed by the first few words of the post: "Rocket Pool launched recently". Partnerships to establish liquidity incentives haven't been built for example.

          Additionally, dex liquidity isn't at all central to the protocol, and so the team so far has placed liquidity towards the bottom of the priority list. It's a great convenience feature for users who need to pull their money out, but if all you're planning to do is buy and hodl, you don't need that liquidity.

          In the long term, I'm hoping to convince Rocket Pool to partner with Olympus Pro to fill out liquidity, but I imagine we'd need the community to crystallize on an incentivizable pool like curve before that's possible.

          millunare Chiming to emphasize that rETH liquidity will be a nonissue soon. Wouldn’t be surprised if momentum builds by the time this proposal (if we get the opportunity) becomes official (incentives/options are being evaluated as I type). We will incorporate liquidity plan/recent steps in proposal to make this more clear.

          If anything the current lack of liquidity is indicative of the strength/commitment of our current user base. The flow of ETH into the protocol - supporting nearly 500 minipools - is by people who have no plans to sell; they are in it for the long term.

          That said, liquidity is understood as important, and will be addressed soon @letters said - it’s all just getting going!

          Smart investors never put more than 1% of capital into any 1 investment so, 5% is a no-go from my perspective. I'm struggling to understand your statement about nodes in 55 timezones. Is there really a place on this planet that sets their clocks 4 minutes and 12 seconds behind those that live just east of their timezone? The Alchemix integration has piqued my interest.

            IceKohl first of all, warren buffet suggests that if you have more than 6 investments then you're too unfocused, so I dont know where you're getting this rule from.

            second, it's not 5% of the treasury balance, it's 5% of the eth reserves we're talking about here

            IceKohl When Rocket Pool node operators register with the network, they may opt to disclose their timezone. The network uses the TZ database to define an operator’s time zone, and in the TZ database there are 500+ time zones. https://en.m.wikipedia.org/wiki/Tz_database

            I understand the confusion; most people (me included) typically define time zones with respect to the prime meridian. But, many computer systems leverage this TZ database, and it defines a time zone as any national region where local clocks have all agreed since 1970. This definition concerns itself first with geographic areas which have had consistent local clocks.

            IceKohl When you consider that some areas of the US respect daylight savings time and some don't, computers need some way to represent that. For example, some counties in Indiana in the US doesn't respect daylight savings time. So from a computer perspective, even though indiana is in the Eastern time zone, you'd want a different time zone than Eastern for those Indiana counties, so that computers know the correct way to keep time in those counties.

            That's just one example out of countless examples. time zones are very, very, very complicated. If you're interested, check out https://www.zainrizvi.io/blog/falsehoods-programmers-believe-about-time-zones/

            Voting in favour, rETH has been heavily audited and bears very low smart contract risk; a decentralized yield bearing derivative of native ETH.

            I strongly support this. Laid out very well.