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.

                          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.

                            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!

                              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

                                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?

                                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.