OIP-15: Add ETH to the Treasury

Animaker

I will keep it straight and simple. It seems like a no-brainer. Ethereum is the network where Ohm grew on and if we can capitalize and grow the treasury with that, the better for the protocol. Very welcomed.

maldor0r

Animaker , even being in the same overall mindset, I think the general idea is a no-brainer, but in a naive implementation we get the upsides as much as the downsides.
And I am not convinced by the self-referential rationale "we are on Ethereum so already commited, so why not go all the way". Merely highlighting that the details will very much matter, and alter how the OlympusDAO benefits from it.

woofwoof

How would this affect the Staking (3,3)?

Dropkickdarren

woofwoof No ser, it would not! This proposal would mean your OHM is being backed by more value- a win, win for the 3, 3 army

RichWarren13

I’m just learning everything about Olympus. If the idea is to have another coin that Ohm is backed by, why not use Gemini or Tether as another stable coin?

How much would it affect the APY and staking benefits if ETH’s value goes down to 500?

maldor0r

Hi RichWarren13 , the main goal stated in this proposal is to further "decentralize" OHM, in line with the project's goal to become the decentralized unit of account for the future of DeFi (and beyond!).

So the project is not to be some magic money down the line. Backing OHM (independently of the way to do it) with Eth, is backing OHM with an asset not itself backed.

You name GUSD (Gemini) and USDT. Those 2 stablecoins are centralized stablecoins (there are one entity making sure to peg those assets to the dollar by backing 1:1 USDT to USD for example). So it would defeat the stated purpose.

Hope it can help!

BTCFarmer

Definitely up for this ETH proposal, I'm wondering if we could not benefit from accumulating stablecoins not USD based. EURO, JPY or even gold. In order to create an ever more robust floor.

Dropkickdarren

BTCFarmer This is currently tricky from a regulatory perspective because if we were to accumulate these assets they would be synths/derivatives (the underlying asset). There are still active talks of moving into some of these assets- the risk just needs to be evaluated properly!

JFry4

foks The only way this would happen if DAI or Frax lost peg. Olympus Treasury holds at minimum $1 worth of DAI/Frax per OHM minted. In this hypothetical scenario, if we were to raise it to $20 then the Treasury need to have that much per OHM.

pipoctopus

When buying ETH bonds, what will we deposit? A mixture of DAI/FRAX + ETH?

I'm trying to understand how the protocol will collect $1 + % of ETH per OHM minted?

kschan

pipoctopus You will deposit ETH in exchange for OHM. As the treasury accumulates ETH, each OHM will be backed by a % of ETH in addition to other assets in the treasury.

111-altrektcrew

great addition to bond portfolio. again great move wen we make it-
@DAO, keep hitting it out of the park, much appreciated!

Giphy - Well Done Reaction GIF

Tao

To bond with ETH, game theory needs to be considered. If ETH rises rapidly, if Ethereum falls rapidly, how should the system respond?

Kalash

Tao so... My take (which could be COMPLETELY wrong) is that 5% of the treasury will be targeted to be held as eth. If eth goes up, the protocol stops buying eth. It may even sell some.

If eth goes down, the protocol will buy it...

Which..... Dca at epic scale.

Or arbitrage using time VS using competing exchange rates.

All in all, it seems like it would make the treasury more profitable (post initial purchase) over time. Yes... There will be some instability, but as eth fluctuates, if the 5% is maintained, the protocol will always be buying lower and selling higher. There should be some fuzziness (not a strict 5%, but a small range the protocol is content to operate within (4.8-5.2% for instance) so it doesn't panic buy and sell...

But overall I see this leasing to longer term ohm value growth due to treasury value increases.

Dropkickdarren

Tao When you consider the conservative 5% target of the treasuries RFV, price appreciation and depreciation shouldn't negatively affect much other than the rate at which RFV grows.

It won't be much of an issue because we're not using this ETH to mint new OHM, we're using it to bolster backing.

HandyJandy

foks it would still come from the other bonds that we offer- DAI, FRAX etc

Dropkickdarren

Pasta ETH has proven itself as a robust asset from a risk perspective. I think Brian is referring to BED being nascent in nature and has more smart contract risk as it's lego built on-top of ETH with other AUM, rather than naked ETH which lies at the heart of all of these dapps.

Dropkickdarren

ecce_ohmo Hey friend, if you're interested in understanding more about how the bond mechanisms work/are managed by the policy team check out our docs @ https://docs.olympusdao.finance/references/equations#bonding.

I also encourage you to ask q's around the discord server! Also, check out the #policy channel to see some of the updates from the team 🙂

sopho

does it makes sense consider staked Ether (like Lidos stETh) for the treasury?
or is there any other way the treasury can benfit from Eth 2.0 staking rewards?

BrianPeace

I'm very much in support of this proposal. We should own the land we live on. ETH is a very productive asset and it will strengthening the treasury. I'm looking forward to voting yes on this on Tuesday.

Coud

all i gotta say is LFG - left side IQ curve

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