IDEA - Using OUSD for yield generation + increased PT prizes

[pete]

Hi PT team and community, I am Peter from Origin Protocol. I am posting this as an idea to gather feedback before submitting as an official PTIP, and as a response to @Brendan’s post from 10/24,:

@Brendan

What do you want from the next PoolTogether?

and @TheRealTuna’s comments on the post:

@TheRealTuna

What’s missing for me is.

• Life changing prizes
• Income to treasury
• Partnership opportunities
• More yield sources

We would like to explore a partnership between Origin Protocol and PoolTogether, potentially utilizing the Origin Dollar (OUSD). Three ideas we had for this are listed towards the bottom of this post.

Origin has been around since 2017, and in 2020 launched the Origin Dollar, an ERC20 stablecoin that generates yield while sitting in your wallet. OUSD can be obtained through any DEX, a handful of CEX, and minted through the dapp on ousd .com.

About the Origin Dollar:

It is backed 1:1 by USDC, DAI, and USDT at all times; holders can go in and out of OUSD as they please. Yield is paid out daily (sometimes multiple times per day) though a positive rebase in the form of additional OUSD, proportional to the amount of OUSD held.

OUSD yield, currently ~7% APY, comes from a combination of:

1. Lending collateral to Aave, Compound, Morpho, Curve, and Convex
2. Incentive tokens (AAVE, COMP, MORPHO, CRV, and CVX) are automatically claimed and converted to stablecoin
3. A 25bip exit fee is charged to those who choose to exit OUSD via the dapp (avoidable if using DEX or CEX), this fee goes back to OUSD holders
4. OUSD sitting in non-upgradable contracts (about half the OUSD in existence) does not rebase, instead the interest generated from those tokens is given to those that can rebase

These 4 yield generating functions enable OUSD to generate higher yields than lending directly to any one strategy. Each week a governance vote is held to determine the best allocation of OUSD collateral between the whitelisted strategies, voted on by OGV holders. OGV is the governance token for OUSD, and any token holder can participate in these votes. Analytics for the current OUSD allocation and backing assets are always available on-chain via analytics.ousd.com.

Similarly to PoolTogether, there are no lock-ups, terms, or conditions with OUSD; it’s completely non-custodial. Any web3 wallet should be able to support OUSD and its rebasing function, including hardware wallets and multi-sigs. There’s no need to give up the keys to a 3rd party platform, such as Celsius, Blockfi, or FTX.

Security is also extremely important to the Origin team. 9+ audits have been done since 2020, all of which can be seen on https://docs.ousd.com/security-and-risks/audits, and we now have OpenZeppelin on retainer. On-chain insurance protocol InsurAce awarded OUSD a security rating of AAA, of which only 5 projects on the InsurAce platform have received.

Ideas For Partnership

There are three ideas we had for ways Origin and PT could partner, Origin engineers could potentially contribute to #1 and #2 if necessary:

1. Integrating OUSD functions into the current ETH Pool - Current USDC APY on Aave is 1.21%. Allocating a small amount of mainnet USDC from PT through OUSD would lead to greater returns, and thus, greater and/or additional prizes for PT users each day

2. Creating a second mainnet pool - If PT were to have a pool where all mainnet USDC was routed through OUSD, APYs would be 2-3x greater than the current mainnet pool

3. Extend the runway of PT and the DAO - We assume PT users and the core team want the protocol to survive the bear market. By converting a portion of the idle stablecoin in the PT treasury into OUSD, those stablecoins will immediately begin earning interest, extending the runway of PT a bit more each day, without having to manage a position.

We invite all PoolTogether users and the core PT team to provide their thoughts on this post, and look forward to beginning a partnership!

[Brendan]

Hey Pete!

Thanks for reaching out. I’m definitely interested in partnering.

We’re currently working on the next version of PoolTogether, and Origin would be a natural fit as one of our launch partners.

The next version will combine yield from any number of yield sources, so we will be seeking partnerships with protocols such as yours. Origin especially, in fact, with your record of security.

I’ll reach out on Discord and we can set up a call!

[BRONDER]

Hi!

We’ve been taking a look at OUSD this past dates. It definitely sounds like an interesing stablecoin to be introduced in PoolTogether.

Current version of the protocol does not allow us to easily introduce new assets/yield sources unfortunately, therefore modifying the existing pool or creating a new one is not really a viable thing.

As Brendan has already suggested in the forum, OUSD is a really interesting asset for us to include once the next PoolTogether version is released. Therefore we will wait for that and definitely get in contact with you or somebody else from Origin when that happens.

Regarding adding OUSD to the treasury, we are not currently interested in it unfortunately. We would like to stay highly “liquid” for now. Once the protocol starts to consistently earn yield and increase the Treasury’s TVL, we will reconsider this possibility.

[pete]

@BRONDER

Current version of the protocol does not allow us to easily introduce new assets/yield sources unfortunately, therefore modifying the existing pool or creating a new one is not really a viable thing.

As Brendan has already suggested in the forum, OUSD is a really interesting asset for us to include once the next PoolTogether version is released. Therefore we will wait for that and definitely get in contact with you or somebody else from Origin when that happens.

Understood. We’ll start the initial conversations with Brendan and his team, and will build where we can with what’s available currently.

@BRONDER

We would like to stay highly “liquid” for now.

I meant to add this to the RFC but looks like I forgot, and my current “trust level” will not let me edit the post - OUSD is completely liquid! No staking or depositing into a protocol is required to earn yield, the tokens stay within your wallet the entire time with the rebases sent to you automatically. In a way OUSD is similar to the receipt token you receive when depositing USDC into Aave, aUSDC, except OUSD is not a receipt token, it is a full-fledged stablecoin with $50m+ in collateral backing. PoolTogether would be able to unwind the OUSD investment at any point, at the speed of the Ethereum blockchain.

[BRONDER]

OUSD is completely liquid! No staking or depositing into a protocol is required to earn yield, the tokens stay within your wallet the entire time with the rebases sent to you automatically.

I’ve read the documentation, and I know that indeed you can exchange OUSD on a DEX or redeem it’s underlying assets paying an exit fee. However, we still consider that given the current Treasury we have, it’s not worth it for us to add other yield sources with the current risk/reward balance.

[pete]

@BRONDER

However, we still consider that given the current Treasury we have, it’s not worth it for us to add other yield sources with the current risk/reward balance.

No problem, this RFC was meant to gather initial feedback on the 3 ideas anyway. Looking forward hearing the thoughts of the greater PT community this Friday!

[minorthreatmikey]

@pete

It is backed 1:1 by USDC, DAI, and USDT

Let’s please not use anything backed by USDT. Wether we believe in the inherent risk of USDT or not, I think it will be a big deterrent for many people.

[pete]

Hi @minorthreatmikey, thanks for chiming in. The Origin team is closely monitoring the OUSD collateral on a 24/7, 365d basis. If at any point one of the three stablecoin appear to be heading in an unfavorable direction, the OUSD team will de-risk and rebalance the collateral, with the approval of the DAO. Here is one example of this happening: Snapshot

Completely understand your concern on USDT though. We have heard concerns about DAI and USDC as well. At the moment we are evaluating other potential stablecoin to back OUSD, such as LUSD. If you have any thoughts or suggestions, feel free to start a conversation in the OUSD Discord, or submit a proposal via the new OUSD Snapshot page!

[pete]

Dropping a quick note here on the past weekend of 3/10/23 - the 1/3 backing by USDT helped prevent the OUSD peg from falling as low, and for as long, as USDC and DAI. OUSD was back at 0.99 within 17 hours.

In situations where the price of DAI, USDC or USDT fall below $0.998, OIP-4 disables minting of additional OUSD tokens using the de-pegged asset.

OUSD holders profited $120k (41% 7-day trailing APY) from the weekend, as shown in the screenshots below and confirmed on the OUSD analytics page, thanks to the combined four yield generation methods working simultaneously, outlined above.