Market Making Proposal from GSR
No because CEX using gOHM is very bad for v2. Imagine Binance and Coinbase voting for stuff with users’ funds. Olympus is setting a valuable precedent here.
25k ohm is tiny. Yea GSR will make profit but it will lead to more onboarding. Charging them interest when they’ve agreed not to stake is ridiculous.
Who cares if a CEX buys gOHM on the open market? Just another whale IMO. You seem to not understand the difference between being given something and buying something. Also have you asked any ohmer if they think 25k OHM is a lot or a little OHM yet? Average wallet has about 3-4 total OHM in it…
Listened in to today's AMA. Thank you for the professionalism and the respect shown to our community. Like Zeus and Wartul said, whether we like it or not, cex listing is incoming. We'd better anticipate and prepare for it in advance. I'm all for this proposal. Olympus has really matured. I'm so excited for our shared future at hohme.
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While I know the topic of people holding ohm on CEX's receiving staking has been brought up plenty, but I think maybe it hasn't been high lit the amount of hype that that might drive. In defi, 1,000% APY is considered small… having spent time in the crypto subreddit, people are hyped about staking ALGO and getting 5% APY. If we roll in there with a thousand percent? It will literally melt faces.
we'd be looking at the insane rewards available in defi, without having to wade through fishy links, scammy dms, seed phrases, sending coins to contract addresses… It would just be people with their FDIC insured custodial wallets clicking 'buy' on our coin, and making 100x the reward of the next highest staking coin. Olympus might have trouble in defi keeping people from chasing high APYs, but we would be a godsend to 50 million? 100 million? more? CeX users that have never heard the word 'fork'. They would buy until there are no more to buy.
the first DAO to do this wins.
Listened to the AMA. My main concern is keeping governing power out of the hands of CEX and any other kind of centralized authority. This deal can help with that, so I'm cautiously optimistic. Looking forward to the next discussion on this once the details are ironed out.
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GSR -- Gate and MECX are shitcoin exchanges and it is irrelevant OHM is listed on there.. no one is going to get burned with that process.
I open market bought myself into a top 1% wallet v the firm who is arguing for this being a good thing knowing full well they can't lose (you truly cant lose here let's call a spade a spade).. this is where we stand. I hope people reading this can figure out who might have more incentive alignment with their bags here. I respect that you provide a service, but what I am trying to tell you is it's not needed yet (my 2c, just 1 person in this DAO) and perhaps at a later day.
I have conviction and have poured bandwidth/time/money into this DAO (both keeping myself on top of how it works + helping ppl in discord and explaining the nuances of the protocol) your firm isn't even willing to buy in (buy gOHM) with skin in the game to make this happen.. of course not, specifically because it doesnt actually matter how the token performs as your incentives are just fee abritrage and onto the next 1 (and there are hundreds ofc) when it's no longer in your financial incentive to spend anymore time doing this.. mine are aligned with actually building something useful here and I am actually risking significant capital to push the vision forward. And at this stage doing this is just alarm beds ringing in my head. When we vote on this I just ask for an option of revisiting CEX exchanges in the future, I am pro-CEX exchanges, just not before multichain and not before we're much more developed as a DAO.. another 3-6 months minimum IMO
I listened to the AMA yesterday, and while there are concerns that were not spoken to. I think the question we have to ask ourselves is how much control do we want with what comes next?
We are a top 50 token, that's a huge accomplishment, it also means that CEX listing is going to happen and soon.
The DAO gets a much better result if we are in the drivers seat showing the CEXs we are serious and telling them the best way to get OHM to the masses. If we wait for them to figure it out and they are going to come up with their own plan for how this will work and its not going to be as favorable to us. To work with CEXs we need a market maker partner.
GSR has gone out of their way to engage with the DAO, in an industry that the standard is secrecy they have stated many if not all of their motives and intentions.
We need to partner with an MM who is interested in engaging with the community and willing to insert terms into the contract which we are concerned about. The next best option is rolling the dice and hoping one of the 7-8 MMs we have already engaged will come around before an actor we have no control over does this without us.
I understand that giving them an interest free $16-20mm is a lot of money, but its such an asymmetric bet. We risk not getting interest or whatever on$ 20mm of OHM with the upside of a $13B+ market cap in just 6 months? I would take that bet all day.
GSR's and our interests are largely aligned, the next actor could be anything. So I am bullish on this as long as the core team which has been researching this from the beginning is comfortable with the terms of the contract.
Speaking of which, I want to say a big thank you to the team for all your work here, @Wartull I know you have been leading the charge and I am glad you are on it.
1 GSR doesnt make spring. Don't expect too much from it.
The strength of OHM will continue to be what it always have been. Giga brains, DAO, community.
In favour of the proposal.
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Another thing that was being discussed in the Discord is this:
The bottom line is that 80-90% of people will not go out of their way to get into DeFi. They won't leave their CEX. They will not learn to use MetaMask, and how to operate with DEXs, all of this. Call it lazy or whatever you want but this system is not really user friendly and we are all a bunch of degens willing to put up with it because of the gains to be had. I know what everybody here thinks, because I am on the same boat: "Not your keys, not your coins", "Centralized authorities suck, that is not the point of DeFi", large etcetera. This is all true. But that does not change that fact: Most people in crypto are operating within a CEX, they feel comfortable there. I know a few, I've recommended OHM to them, and they simply will not buy anything outside of their exchange. I'm sure that story rings a bell for some or most of you. We can stay DeFi purists and have a "If you build it they will come" approach or we can go to them. If Olympus wants to be a top 10 or top 5 project, we need those people as part of the market cap.
What happens on say, Coinbase, if suddenly a new option shows up for people with the possibility of staking and an APY of 1k? Most options on CEX regarding interest rates and what not don't go over 10% APY. DeFi has very little presence, with "conservative" options like cDAI or similar stuff. The Olympus model would be incredibly attractive by comparison. We think nothing of our 7k APY because of the sheer revolution that this model has created, with insane APYs available on forks. We forget how massive this is compared to TradFi or DeFi 1.0. Olympus is in a great position to completely disrupt that game as the original project with this model in a CEX, as it did with DeFi… if it gets listed first.
Olympus is the leading project of the Olympus model (Duh!) but there are forks out there, and I wonder what happens if one of them gets listed within a CEX with the option to stake before OHM. I think the first project of this type to get listed in a CEX is going to win a massive advantage in terms of volume and market cap. That project has to be Olympus. 20m is a lot but the bet is very asymmetrical IMO. We just need to figure out a way to ensure that centralized entities stay out of governance.
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I see the main point of this as us being proactive on an unavoidable CEX listing to have our own terms and avoid centralized exchanges having governance power. I support this proposal.
Tetranode here
I oppose!
Loans without collateral are red flag
What's the reprecussion in case they default on our loans?
Do we need CEX when we can have onchain with sushiswap and curve?
If you followed the Celsius incident, I have no faith in third-parties of centralized types interacting with us at all: https://twitter.com/BigTimeCali/status/1466556925127000065
Want cheap options on L2?
Work with Dopex
Hi everyone, Evgeny here from Wintermute.
tldr: I think there is an opportunity here to gain significantly more from this proposal by considering more MMs with strong defi capabilities. Wintermute can bring very unique value prop by providing liquidity in multichain world, not just on centralized exchanges
Let me start by saying its unfortunate I’ve missed this post 5 days ago – its tough to keep an eye on everything in defi, especially with markets being as they are. However late, I’d like to weigh in on this given we are pretty active in defi (both on trading and governance side of things) and we did quite a few of MM deals ourselves this year
So first, about Wintermute
Wintermute was founded in July 2017 by three Optiver veterans. We are active on all tier 1 and tier 2 cexes, all key defi protocols (AMMs, aggregators, CLOBs) and across other chains (Polygon, ZKsync, Avalanche to name a few) with a general focus on creating liquidity in a multichain world. We have a strong OTC desk focusing both on hnwi/family offices and services retail aggregators.
Wintermute is trading $6-8 bln on a normal day, $1.5 trl since we started counting. Significant part of it comes from our defi operations. We have been in defi since 2019 and are top MMs on DYDX and largest PMM on 1inch just to give two examples
Wintermute is backed by Lightspeed Venture Partners, Pantera, Blockchain.com Ventures, Sino Global
and others
Now back to the proposal. Factually, we’ve been approaching (and being approached by) DAO’s to become their Market Maker quite a few time this year. To that degree it’s not super accurate to say that this proposal (and AMA) is something unseen on defi
. To provide an example:
https://vote.indexcoop.com/#/proposal/QmZJzVGRgsu4AZVWyr4zqeuQLYfbjmq3n7dGGJmrNNKp7b
In general, being a MM for a project is an important strategic part of our business. On a most basic level it allows us to get inventory to project’s token (and we generally expect to make money from that inventory for liquid tokens) and gives us an upside in form of options. However, we typically like to dig deeper into how we can provide value. In the abovementioned Indexcoop proposal we went beyond the usual setup and committed to provide liquidity in their index products. This deeper engagement is very much in line with our defi focus and it also helps to set us apart from other MMs who are not necessarily that sophisticated with what they can offer.
I understand that DAOs have to make certain choices and cannot just vote on everything and get into analysis paralysis. What’s missing for me (and looks like for at least a few others on this forum) in this proposal is who else has been in consideration list and how GSR made the cut. From my experience, the top firms, working in the loan+option MM business, currently are GSR, Jump and Wintermute. There are quite a few others as well. The main negotiation points for these contracts are size of the loan and strike for the options. Other things equal, MMs then try to convince the project about all the other amazing things they can do. Most serious MMs would have sufficient coverage for centralized exchanges, so it’s not really a differentiating point. For us it is:
- bringing liquidity to other chains and generally do cool things others cannot (for OHM specifically we could think about something for sOHM, gOHM and whatever other random alphabet letters will pop up in future). Think beyond scaling/L2s and even beyond EVM chains, starting with Solana for example
- being an active governance participant (without necessarily casting the votes using our loan – we usually specifically agree with projects whether it is acceptable or not (most of them say no and its cool)). We are even hiring people to focus on this full time (and welcome anyone at Olympus to consider and apply!):
https://jobs.lever.co/wintermute-trading/bc082c00-c48a-447a-a2c4-e1d19f59c76f
- anything OTC related. This is generally focused on treasury diversification or helping individuals to buy/sell OHM without significant market impact. But we can be creative and do something more complex on structured product side
- We also have at least two ohmies at Wintermute currently, which is not really a selling point but thought would be fun to mention
Also, reading through the comments, wanted to address a few points that were raised about MM model in general:
- Cex listings are inevitable if $OHM continues to be successful. Having a market maker will likely speed things up, but it’s not a 100% prerequisite. $DYDX launched without a marker maker on quite a few key exchanges despite the team being very vocal on not focusing on it (and being very much against engaging with Market Makers)
- There have been instances where MM signed agreements with DAOs (we did), but at the end of the day your main protection is the good name of your MM being damaged from doing something against the agreement or, worse, not returning the loan. Reputation damage for us (or GSR or Jump) would greatly outweigh $20 mln
- Loan amount is a very important consideration and I’m a bit on the fence with this one. On one hand its generally quite big – $10 mln would have been enough to cover most cexes. On the other hand, we would have required full $20 mln to cover dexes (and other chains). I’m not sure if GSR is a PMM for aggregators like 1inch or Paraswap – we are and would require some inventory for that
- A related point and one which I’m also still figuring out myself is whether an option is a big deal at all, given how much dilution $OHM will undergo in 6-12 months time if all goes well. A potentially better structure (from MM perspective) would be to keep increasing/decreasing the loan as % of total tokens issued and tie the option to the total market cap instead of price
To summarize as I’ve covered a bit of ground here. Wintermute would like to get into the consideration set. We are the strongest MM in defi across multiple chains and protocols and will only grow our coverage going forward. You can potentially add a lot of value by considering more MMs (Wintermute, Jump and Alameda at the very least). Otherwise there should be a good explanation of the decision process
I will vote yes if GSR rebrands to "Climate Change" or "Longevity Research" charity.
wishful_cynic Hey Evgeny, thank you so much for taking the time to put together such a detailed post. Would you be willing to submit your own specific forum proposal on behalf of Wintermute? I think it would be ideal to let OHMies see the official "offers" (obviously the specifics can be ironed out prior to this w/ the appropriate members of the DAO) before we send anything to snapshot.
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Very nervous about this one, getting on a CEX invites derivatives and because of the high yield it makes for an excellent shorting opportunity….initial reaction is not great personally, worried about the effect shorting at scale will have on price.
Would rather the team focus on new ways to increase liquidity / RFV vs. listing on a CEX and hoping for price appreciation
IDKFAIRL Agree with Tetranode, and will be voting against this proposal