Hello, I am Peter from Origin Protocol. I would like to propose adding the Origin Dollar (OUSD) as an asset market for lending and borrowing on the Strike Finance dAapp.
Background on OUSD
The Origin Dollar was launched in 2020 and is Origin Protocol’s second product, behind Origin Story, which launched in 2019. OUSD is an ERC20 stablecoin that generates yield while sitting in your wallet. OUSD 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 and automatically (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 ~5% APY, comes from a combination of:
- Lending collateral to Aave, Compound, Morpho, Curve, and Convex
- Reward tokens (AAVE, COMP, CRV, and CVX) are automatically claimed and converted to stablecoin
- A 25bip exit fee is charged to those who choose to exit OUSD via the dapp (completely avoidable if using DEX or CEX), this fee goes back to OUSD holders
- OUSD sitting in non-upgradable contracts (about half the OUSD in existence) does not rebase, instead the interest generated from those tokens is provided to those that can rebase
These 4 yield generating functions combined enable OUSD to generate higher yields than lending directly to any single protocol. 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 after staking their OGV for veOGV. OGV holders also have the ability to propose new yield strategies for OUSD. The current asset allocation can be seen via the OUSD analytics page, with a day-to-day APY here.
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 ever again give up the keys to a 3rd party platform, such as Celsius, Blockfi, or FTX, to earn yield.
Benefits to adding OUSD to Strike
For Strike users
OUSD lent provides an immediate arbitrage opportunity on the borrow side for Strike users - users will choose to borrow OUSD when the variable APY to borrow OUSD from Strike is lower than the amount OUSD will generate in passive yield sitting in user wallets - users capture the difference in APY as pure profit.
For the Strike protocol and DAO
The profitable opportunity to earn additional yield from borrowing OUSD will create significant lending demand for current OUSD holders, and the constant lending and borrowing will capture significant trading fees for Strike on the borrow side.
For current OUSD holders
At the moment, the only use case for OUSD is to hold it in your wallet to generate yield, or LP it on a DEX. Adding an OUSD market for lending will provide a new utility for OUSD holders, and an alternate option for yield generation. If it’s possible to enable OUSD rebasing for OUSD lent to Strike, then OUSD holders are incentivized to lend by the double yield generation. In the event it turns out to not be possible, or to be too complicated, to enable OUSD rebasing within an Strike lend market, it would still be beneficial to enable non-rebasing OUSD for lending and borrowing on Strike, as the constant borrowing of OUSD will increase the APY for lending OUSD to Strike.
OUSD Proposals on Other Protocols
There are several similar proposals going through the governance process at the moment with other lend/borrow markets, such as:
- Aave - [ARC] Add support for Origin Dollar (OUSD) on Ethereum V3 - New Asset - Aave
- Ondo (Flux) - [FIP-02] Adding OUSD Support - Governance Proposals - Flux Finance Governance Forum
OUSD as Collateral
Given OUSD would be a new asset market to Strike, we are proposing to start with a low collateral factor, between 1% - 25%. If it would make the community more comfortable, we would be open to adding the OUSD market without enabling OUSD as collateral on Strike, for the first 90 days, or indefinitely - as it would still be beneficial for current OUSD holders to lend to Strike, and for Strike users to borrow OUSD from Strike.