Hey all, seen some discussion in the discord regarding Olympus Pro bonds and if we can make use of them to benefit the protocol. I’ve been following the recent release and roll out closely within the Alchemix community which has been a massive success so far and something we should look at as a community.
What is Olympus Pro:
Olympus Pro is a service provided by Olympus DAO aimed at helping protocols acquire their own liquidity through bonds, over a long time period this means protocols own their own liquidity which has two main benefits:
-Secure liquidity for the long term
-Allows the protocol to pay out less in liquidity mining
This is done through LP bonds, a user would take their ETH/POOL UNI v2 LP token and bond it through Olympus Pro. The protocol provides POOL tokens that are sold at a discount to bonders in exchange for LP tokens which go into the PoolTogether treasury.
Process for bonding:
- User enters ETH/POOL LP to get LP token
- User bonds LP token through Olympus Pro
- LP token enters PoolTogether treasury
- User receives discounted POOL vested over a week
Currently we’re paying out 300 POOL per day to liquidity providers in exchange for liquidity on the ETH/POOL pair, over the long term this may not be sustainable. Once the rewards stop or a better opportunity comes up, the liquidity will likely move elsewhere.
If we as a protocol own our own liquidity, we can direct the POOL elsewhere and do not need to pay for liquidity over the long term.
The discounted POOL that is sold also goes towards people who are more likely to hold POOL instead of liquidity providers who have no incentive to hold.
If we look at Alchemix since the roll out of Olympus Pro, 50% of the tokens that were previously being used for liquidity mining are now going towards buying liquidity that is now locked potentially forever within the treasury. Alchemix now own 430k of their liquidity since the launch 2 weeks ago.
-Stable long term liquidity on ETH/POOL pair
-Receives fees on LP pair
-Pay out less for liquidity mining
-Strengthen relationship with Olympus community
-Liquidity providers will receive less rewards
-Discount can become wide if there’s a lack of demand
-Currently only available on layer 1 of Ethereum
Would you be open to looking at introducing bonds through Olympus Pro?