[Proposal] Olympus (Pro) Treasury Index ($OT)

#1

Authors: Glue, Bonding_Brian, Abipup, unbanksy

Summary: We propose an index of tokens backing the Olympus DAO Treasury as accrued by the Olympus Pro bond program.

Category Description

Olympus Pro (Olympus Pro - Bond marketplace for protocol owned liquidity.) offers Olympus DAO partners to accumulate their own liquidity similar to Olympus DAO’s own bonding mechanisms for DAI, FRAX, ETH, and LUSD. Over time, Olympus has acquired over $150M+ in LP tokens and has recently launched Olympus Pro.

Through these partnerships, the following tokens ensure deep liquidity that only grows over time. Unlike typical tokens, the LPs are held by the ultimate diamond hands in the respective partner’s custom treasury.

Index Composition
This index will track two main parameters current TBV (total bond volume) and current MCAP. Our Olympus Pro index seeks to track the weight of both the existing market cap of underlying tokens and the total bond volume. As bonds are a new defi primitive, we would create a preferential ratio toward the current TBV at 75% and the current MCAP set to 25%.

The current OP coins can be found here:

Screenshot 2021-10-12 at 16-01-51 OP Index

Due to the voracious nature of Olympus DAO community we propose an initial price of $33.33 per OT token. OT pays homage to the infamous #off-topic channel in the Olympus DAO main discord.

More information about Olympus Pro can be found here: Introduction - Olympus Pro

Current Challenges

This index requires a metaoracle to be developed in order to acquire MCAP prices for those assets that do not have liquidity on Uniswap V2 (e.g. SPELL).

Current Indexed infrastructure means that pools can support a maximum of 10 assets with weights bound to them, and are fixed in size once they are deployed.

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#2

I’m super excited to see this: it’s the first proposal that’s arrived in our forum that’s come from a separate DAO. Thanks for bringing this to us, @Glueeater - I hope I speak for all of us when I say I’m excited to make this happen!

Once we’re upgraded fully, we’ll be able to support pools with dynamic sizes up to 50 members, but I actually think it might introduce a notion of competition that’s a positive for Olympus if the final* spec keeps it at around 10. I can explain why I think that in another post once other people have given their thoughts.

  • I say final spec because this does need our metaoracle built out, so there’s plenty of time to iterate/add new candidates as OP grinds on in the meantime!
3 Likes
#3

I’m all for this, let me know how I can help.

2 Likes
#4

This is exactly what I always wanted to see, DAO’s creating their own cherry-picked indexes for their communities. Also this is a great use of a new weighting strategy that I think will be very interesting to see in action.

Since this currently only includes 6 tokens are we planning to initialize this index as a 10 token index and then when more projects enter into partnerships with Olympus we can then add them into the index?

How do you think people will feel about these not being the bonded/staked version of the tokens and would we want to include some sort of incentivization for this? Maybe incentivization in the form of an OT/sOHM LP reward?

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#5

I love the idea, can you help me with the definition of TBV? Is this the total value of all cumulative OP bonds issued (vested?) for the OP partner? In case of Indexed the TBV may be spread across multiple Index Tokens, so would TBV be the aggregate across all?

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#6

Correct - if protocol X does 3 rounds of bonds through Olympus Pro with their token Y, say…

$200,000 of token Y for Y/ETH
$300,000 of token Y for Y/OHM
$100,000 of token Y for Z/ETH

Then the TBV of token Y as far as the OT weighting is concerned is $600,000.

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#8

So, by the time the metaoracle is written/tested/deployed, there’ll be far more than ten protocols that have started running through Olympus Pro.

The way I see this happening is that if we deploy OT after the metaoracle is live, then we go “here’s 10”, and those 10 are likely to be the 10 that have run the most value through Olympus Pro by that point, due to the 1:3 weighting in favour of TBV over market cap.

This is where the part of my brain that thinks game theory kicks in: there’s a non-zero chance that this could kick off an arms race whereby protocols try to ram more tokens through Olympus Pro in order to gain a heavier weight within the OT index, especially if the places within the index are limited to a fraction of the candidates that have participated.

This could be viewed as either cynical arms-dealer thinking (“we don’t care what you’re running through Pro for, so long as you’re doing it”) or a commitment from the protocols in question to acquiring thicker liquidity or diversification. Not my place to decide that.

In the medium term once we’ve completed the Balancer V2 upgrade, we have the option of enabling dynamically-sized pools (i.e. being able to shrink or grow the number of assets within a pool with bound weights). If the OT was an index that ‘underwent’ such an upgrade, it would then be in a position to make the call as to whether it wanted to stick with 10 active members, or increase it to 15, 20, etc.

I don’t think we can make a judgement call about whether all of these tokens are going to be bondable/stakeable assets yet (we’re in the pipes, for example, and up until recently we didn’t have dNDX, and even if we always did, I don’t think dNDX is a good idea for index inclusion). I think we’d definitely want to route some of our liquidity reward hose towards it initially, even just for the initial burst of attention, but Olympus have the reserves to get a non-trivial liquidity pool for this set up as well should they desire. Rewarding for rewards sake, I don’t have an opinion on yet.

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