Summary:
In support of OIP-188, this OIP expands upon a continued strategic reallocation of Olympus’ stable reserves. The objective is to grow the liquid backing of OHM through sustainable, transparent, and policy-bounded strategies, while maintaining sufficient liquidity for Cooler operations and risk management.
Context & Rationale:
The Olympus Treasury currently maintains significant stable exposure in sUSDS across on-chain reserves and lending venues (≈ $37 M combined). Recent developments around Maker’s USDS, have prompted a reevaluation of concentration risk and reserve efficiency.
While the current state does not represent an immediate existential risk, there have been ongoing discussions around further diversification towards liquid, yield-bearing, market-proven assets (notably USDe and RLUSD) to safeguard solvency and enhance Treasury income.
This proposal fits within the broader mandate to grow liquid backing during expansion, ensuring Olympus capitalizes on risk-adjusted opportunity, weighed against solvency and liquidity obligations.
Target Allocation:
Deployment Framework:
Minimum Liquidity Threshold
- Maintain ≥ $5 M in liquid stable reserves (sUSDS) to serve net new cooler originations. For context, satisfying 3x the past months net new originations would require a liquid cash position of $3.3m.
Hurdle Rate & Entry Criteria:
New deployment venues must:
- Offer ≥ 1.5× the sUSDe yield for ≥ 2 consecutive weeks.
- Meet Olympus internal risk criteria (counterparty, contract maturity, oracle risk).
Exit Conditions
Exit any venue if:
- Yield falls below the sUSDe benchmark for ≥ 3 weeks.
- Counterparty or protocol risk materially changes (governance downgrade trigger).
- Treasury or Governance votes to unwind due to macro or internal need.
- A more favorable opportunity presents itself and there is community support to pivot to it directly vs. going to sUSDe and requiring 2 weeks to pivot (The conditions above which are intended as boundaries, not blockers.)
Operational Mechanics:
- Rewards harvested will be swapped into sUSDe/sUSDS and either routed through YRF for automated buybacks and burns or TWAP’d to OHM as a supplement to it.
- All movements tracked via public Treasury subgraph dashboards.
Expected Outcomes:
Enhanced Treasury Yield: $1.1m / year incremental income at current rates, socialized across circulating supply in the form of buybacks.
- Reduced USDS Concentration: Diversifies away from Maker-specific risk.
- Policy & Execution Framework: Establishes a reusable template for future on-chain yield strategies.
- Operational Readiness: Enables fast response to future opportunities (e.g., > 10 % APR venues).
Next Steps:
- Ratify allocation policy and thresholds via Governance.
- Deploy capital per Target Allocation Table, using existing multisig execution paths.
- Integrate new assets into our subgraph for tracking.
Review after 30 days and adjust sizing per yield/risk data.
