Madbreaks I think longer term we could hold RAI as a stable asset versus ETH. i.e. Exposure with much volatility.

    100% in favor. If we want to be the decentralized currency of DeFi this is a step we have to take. Although not minting OHM when bonding ETH, could have an effect on our runway, I believe this is a small price to pay for minimizing our risk of volatility. The proposed 5% max will help with this too. Great first step to accumulate ETH and to set us up to take even bolder steps in the future.

    For ETH, this makes the most sense.

    Against BasketDAO and such. As a Defi user (but not owner of many of these tokens' in the basket), the volatility of many of the tokens and unclear token capture value tells me it's too soon. For basketDAO specifically, we do not want to be paying fees to the index+get stuck buying tokens (in the basket) that frankly are kind of useless (won't name names to not trigger people).

    Eth is the right step.. anything beyond Eth/stables is just too soon IMO, but ETH @ 5% (or even 10% in my mind) is great

    Love this proposal. The idea of keeping the ETH position separate from RFV is perfect. This is the embodiment of the kind of antifragile banking that OHM is pioneering. Let the market price our ETH position. As long as the position size is small, it shouldn't contribute to destabilizing price. So the downside risk is minimal. But the upside potential is huge.

    Question: are we planning to stake our ETH? Seems like a logical next step. Maybe this can be addressed in a future proposal if the current one passes.

    Final point: I wholeheartedly support the addition of ETH-OHM LP bonds too. We need to start growing this pair in order to reach our goal of becoming a medium of exchange. ETH pairs are in the top on all the DEXs in terms of volume. That means more LP fee revenue for us.

    Where can one learn more about how these naked ETH bonds work under the hood? I'm trying to understand how this is all architected (what moves which funds and where).

      Madbreaks You're absolutely right on a high level. ETH is an asset with a fluctuating market price. I think there is probably more complexity and some deeper theory that I’m digging for.

      For example, after a 90% haircut on the price of ETH, should we consider the remaining value risk free? I don’t like arbitrary haircuts, its more difficult to maintain, and there isn’t any fancy math behind it, but practically speaking its something to think about.

      Alternatively, to what @mudshrk is saying about keeping RFV decoupled, I think we can create synthetic put options via Aave to lock in IDK 10% of ETH’s value in DAI, allowing us to generate some RFV…unless there is a more complex minting reason why we don’t want to mint OHM this way.

        I like the proposition, and the idea "ETH would be assigned a risk free value of 0, meaning we wouldn’t mint against it" especially. I would have to think more about the implications though.

        I am by no means an expert, so please understand I am thinking with you more than anything else, trying to benefit from the collective intelligence this kind of project manage to put in motion.

        I think what you, Jochanan, mention is very interesting. A price ranges strategy (managing volatility to, at the end, integrating Eth type of backing assets more deeply in OHM's stability mechanisms) are interesting - I was thinking to the Ribbon finance product as a temporary step to put it at work, like simply using some USDC and put them in their product/vault T-YVUSDC-P-ETH (maybe a partnership to capture some of the yield as a bonus of OHM's liquidity providing), or implementing this price range strategy through the same mechanism they use for their vault T-ETH-C("The vault earns yield on its ETH deposits by running a weekly automated ETH covered call strategy. The vault reinvests the yield earned back into the strategy, effectively compounding the yields for depositors over time") and using something like Opyn/Opeth as the backbone for it.

        Would not be risk free bonds though.

        I think both are going slowly through more decentralization on the backing and introduce potentially interesting avenues to experiment on stability in an inherently turbulent market (not talking just about bull/bear markets notions obv here).

        Anyway, very interesting proposal I think @shadow

        Thanks!

          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.

            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.

              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?

                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!

                  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.

                    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.

                      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?

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

                          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.

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

                              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.