yieldohmie

Departure into the unknown - with 200m at stake.

The recent activity in the forum and discord servers clearly shows that individual parties have different perceptions of the current state of OHM. We all should take a step back and look at the big picture. Olympus is in the unique position of owning one of the biggest treasuries in the entire crypto space. Unlike others, our treasury is not full of the protocol native token but hard US-Dollars and Ethereum. The odds of any other project ever owning such a big treasury again are very very unlikely, therefore we should treat it that way. With caution and principle protection as the number one concern. A treasury should NOT be treated as one's own personal portfolio, and any allocation to volatile assets above 25% with 200m at stake is absurd in my opinion.

Whatever will cause the next bull run does not require $200m in initial funding. I love all the innovative ideas that people bring up on the forum, including Cooler Loans, and this one. A DeFi native currency fully backed by ETH is a super exciting experiment but in my opinion that should be run like a startup. We don't know if there is an actual product market fit why risk 200m when we could create a spin-out, raise 5m dollars, or use $5m from the treasury to run this experiment? I think that would be a much more reasonable approach to any major shift that people wish would happen to OHM. Risking this once-in-a-lifetime size of a treasury would be detrimental to the long-term future and the possibilities that might come up, which we don't know about yet. 

yettywapp

With only a single audit depositing 5mm is seriously not appropriate no matter what other proposal or currently ongoing. For example, look at the Morpho TAP, they have the most audits, tons of TVL, and are considered extremely secure - even there we proposed a 500k deployment.

Besides that, I want to make sure that: This is not the stance of the DAO, it's my personal opinion.

Also, meanwhile, cooler loans is undergoing a second audit to further strengthen the contract.

My recommendation stays: To decrease deployment to 500k and increase if there is sufficient demand to a maximum of 1mm to keep the treasury exposure at a conservative 0.5% of the treasury.

As pointed out by @citizen_wayne in the RFC

With only having a single Audit from Zellic and the protocol being relatively new (esp. Vendor V2) this does not offer sufficient security measures for a 5 million dollar deployment. Additionally, vendor V2 also never held a significant size in TVL.

5mm is definitely not appropriate for this proposal.

https://github.com/VendorFinance/vendor-contracts-v2/blob/main/Vendor%20Finance%20-%20Zellic%20Audit%20Report.pdf

An initial deployment with 500k is much more appropriate which could be gradually increased as Vendor proves its test of time.

Personally, I will not approve this proposal in this shape, everyone else is of course free to make up their own mind.

streetjesus Morpho only aggregates AAVE liquidity, there is no way to list $OHM on Morpho.

This is simply about deploying an initial 500k DAI into Morpho to earn extra yield.

thomasscovell

Completely agree with your assessment, this is more an opportunistic TAP since we have smaller exchanges reaching out to list OHM. There are no concrete plans to do bribing or incentives activities on the scale as we are running them on Mainnet. We are more talking in the range of 500-2500$ per week experiments in bribes, where we will earn back most of the money anyway, so it has close to no impact on the treasury, but it will still create very attractive opportunities for all Ohmies.

Since there are no clear major opportunities that we would deploy larger sized bribes to, its hard to quantify specific numbers that we are trying to achieve here regarding your request.

Summary

To support the cross-chain growth of OHM liquidity and, by extension, new use cases, establish an ongoing incentives budget that can be used to experiment with incentivizing liquidity on the various DEXes and staking layers on Arbitrum. This budget will be capped at $50k/week.

Background

TAP-15 permitted Olympus DAO to explore the use of Hidden Hand incentives as a means to boost voting power to its LP Gauges. TAP-23 formalized this approach, increased the allocated budget, and extended these incentives to multiple Aura and Balancer markets.

The results so far have been favorable, and Olympus has seen several million in TVL added across its incentivized pools.  On average, Treasury has seen around a 5-15% return, with margin largely being impacted by the decrease in BAL and AURA prices. Even still, incentives have proven an effective means to accumulate liquidity in a cost effective way. 

Motivation

On Mainnet, the liquidity incentives are both good to attract liquidity as well as to increase the protocol’s voting power (by accruing more strategic assets). On Arbitrum, the considerations are slightly different. 

Perhaps most importantly, Arbitrum POL is not as deep as mainnet since the protocol needs very deep liquidity on Mainnet in order to run RBS, whereas on Arbitrum this is not a direct concern. The protocol will not be able to offer the same level of deep liquidity on all chains without reducing POL on mainnet. A way around this is for the protocol to offer a guaranteed base layer of liquidity through POL and extend that with third party liquidity, which is created either through incentives, voting power, or more novel solutions like the recently launched BLV.

It’s important to note that as more OHM finds its way to Arbitrum and as the number of integrations and use cases expand, there will be a need for more liquidity to, for example, support effective liquidations in lending markets. 

Proposal

As such, the Treasury Team requests community approval to create a budget specifically to experiment with liquidity incentives on Arbitrum and to support the creation of more third party OHM liquidity. This budget will be capped at $50k/week. Initially, it is likely that only a fraction of the budget will be tapped. 

Considering the number and variety of DEXes and staking layers on Arbitrum this TAP is not limited to selected venues, but instead offers the flexibility to experiment with various platforms in order to find the most optimal solution to create third party OHM liquidity.

The list of potential assets used to incentivize will include:

• OHM

• USDC

• DAI

• FRAX

• ARB (Preferred)

OHM utilized will either come from OHM already owned by the Treasury or minted specifically for this purpose.

Im in full agreement with Relwyns assessment.

LUSD/WETH pool does not bring significant benefit to our treasury comp.

A LUSD/WETH/OHM pool on the contrary could be very interesting, not only in terms of being able to offer a "decentralized" pool where all assets have this common characteristic. But also this might be useful for better pricing of LUSD. LUSD is constantly over-peg and maybe more arbitrage opportunities can somehow support better pricing.

That being said we are always on the hunt to acquire more LUSD when prices are favourable. We love everything that Liquity team has build so far and looking for further collaboration