Summary: Seek authority from the community to acquire strategic assets that will help Olympus strengthen its prevalence throughout DeFi. This allows Olympus to significantly increase our passive revenue generation, acquire governance power and increase the diversification of treasury assets.
These assets will be acquired through bonds, DAO swaps and/or direct market orders using funds from a newly created investment reserve towards which a portion of the overall bond capacity will be redirected. For clarity, we will not market sell OHM to achieve this.
To ensure best price execution for Olympus, targeted whitelisted assets will not be unveiled until either bonds are live or the Treasury team has completed the purchase. However, the treasury team will evaluate and share the results from the Strategic asset investment framework for each potential strategic asset after execution.
Motivation: When Olympus was in its infancy, the protocol placed a focus on acquiring liquidity and stable assets to bolster the risk free value of the treasury. As the protocol mechanism was new and undiscovered, an emphasis was placed on this metric to provide security and intrinsic value. Today, this has grown to $758,173,633 dollars in market value, and $169,807,441 value in risk free value.
We believe that Olympus has now acquired enough stable assets backing OHM to begin to diversify and acquire more non-pegged assets, and shift a portion of revenue towards increasing the market value of our treasury. It is no longer about risk aversion, it is about risk management.
We want to cement our place in DeFi as the de-facto decentralized reserve currency. By acquiring governance power, we can vote on proposals that benefit the Olympus ecosystem. This will allow for the continued growth and expansion of the Olympus ecosystem.We believe that acquiring certain strategic assets will help us achieve this objective.
With the support of the community, Olympus can acquire strategic assets, and adjust its strategy within DeFi to maximize yield and benefits to OHM.
Important Notes on strategic investments
Strategic investments will not be revealed to the community before approval, to avoid front running. Executing these kinds of deals requires some form of trust from the Community. We will be as transparent as possible by sharing results from the Strategic Asset Framework developed by the DAO.
Strategic investments will only be used to purchase what we call utility assets. These are assets that we intend to keep as long as they help Olympus by providing:
Additional partnerships opportunities
Increased influence on liquidity direction
Governance power in key protocols
Better yield opportunities for our Reserve assets
Diversification in market value of treasury
Unlike Reserve assets, utility assets may or may not be sold by Olympus as we continuously re-evaluate their strategic value.
We propose to limit the amount of strategic assets we can acquire: the cost basis of our strategic assets must be less than 33% of the RFV of our Treasury.
Potential strategic investments
Following the recent CVX proposal, the Treasury team has compiled a list of potential tokens that we think could provide strategic value to Olympus DAO. These tokens were selected for their yield potential, governance influence and partnership opportunities. The governance power of tokens can lead to greater passive revenue. Greater passive revenue can lead to greater runway and backing of OHM.
As always, we remain open to any other suggestions coming from the community and we invite any of you to look for other projects that would fit our strategy. Additionally, any of the below assets or any other one for the matter, must still get reviewed by the Treasury team.
Note: As the treasury grows and other strategic opportunities arise this list may grow to include more assets. This proposal will be amended and undergo another community vote under that circumstance.
Proposal: Allow the Treasury team to autonomously acquire strategic assets on behalf of OlympusDAO. We will limit the Net Asset Cost of our strategic assets to 33% of Treasury RFV. Keep in mind that Treasury RFV is an extremely conservative metric: At the moment, the market value of our Treasury is $762m, versus $170m RFV.
This will allow the creation of an investment reserve which would take away some of the bond capacity from Reserve & LP bonds. This proposal will help Olympus acquire assets without front running risk and generate passive revenue.