BOND-USD SMART Alpha Pool + Olympus Pro

Summary

Set up & seed the senior side of the BOND-USD SMART Alpha pool on Optimism, and extend the Olympus Pro bonding program.

Description

  1. Set up a new BOND-USD pool on Optimism.
  2. Create a DAO vote to seed the Senior side of the pool with 20,000 BOND to give community members an immediate ability to leverage by joining the Junior side.
  3. Extend the Olympus Pro bonding program with 500,000 BOND to continue acquiring BOND-USDC liquidity.

Motivation

A BOND-USD pool would give the BOND holders an ability to leverage or protect their positions based on their market feelings.

  1. Optimism: low gas fees allow for more flexibility in position management as well as decrease the upkeep cost for the epoch advancements.
  2. The DAO acts as a collateral provider to give their community an ability to get leverage on the native token.
  3. Olympus Pro extension allows the DAO to double down on the effort. Coupled with SA senior deposit, it allows the DAO to either acquire more native tokens from SA pool when the price declines or grow in absolute $ value by getting more stablecoins from the LP positions which would balance SA pool losses.

It would also set a great example for the other DAOs who are looking to provide their users more utility for the native token as well as get ownership of the protocol liquidity. We’ve been also thinking about potentially extending SMART Alpha to “SMART Alpha Pro” to provide additional services to the DAOs in that regard but that’s a whole another topic.

Technical details

If everything goes well, we could launch on Optimism as soon as this week. dMob team has already been testing the pool deployment on the Optimism testnet. The next step would be to deploy the BOND token using their bridge.

Other than that, we would need to set up a DAO vote to allocate 520,000 BOND tokens to seed the SMART Alpha senior side and extend the Olympus Pro bonding program.

Argumentation

For:

  • Optimism seems to start getting a lot of traction (which we can utilize) and the deployment process is easy and straightforward.
  • By seeding the Senior side the DAO would activate & bootstrap the pool attracting more users and self-protecting against the downside market movements.
  • Acquiring more LP shares would provide additional revenue streams to the DAO in a form of trading fees along with ensuring there is enough liquidity for the users to get in or out of the positions.

Against:

  • The process of bridging the token to/from Optimism might pull someone back from using the pool.
  • The DAO would be exposed to underlying losses during the upside market movements.

DAO Vote

  • Set up BOND-USD pool - NOT required.
  • Allocate 520,000 BOND - required.
6 Likes

I guess one thing I’d say is if this works well, imo, we could modularize it for the industry which is something Pavlo, Max from FIAT, and I have been working on. This is a good way to prove it out.

3 Likes

What’s the motivation for using Optimism vs an alternative L2? I see the comment regarding traction and deployment, but this sounds like a rather significant bet for the DAO to make in terms of picking a winning L2.

Can you expand on what you mean by “modularize it for the industry?” Are you referring to DAOs seeding the senior side of SA for their communities to potentially take leveraged positions?

Optimism is where a lot of liquidity is going to be (Uniswap), community (Synthetix) and we know one of our originators for SY is looking into it, so we assume a lot is going to be happening out there soon

2 Likes

100% support this proposal. As mentioned in the last project call, some of these chains will need to get culled to avoid fracturing liquidity. I don’t think we are there just yet so widening the offering is much appreciated.

Community members have been asking for a Smart Alpha BOND pool. Love the idea of the DAO supporting the community in an up market and the community supporting the DAO in a downturn. The ability to deliver + the potential of a repeatable model for other DAOs in a nice add.

Can we address the issue of farming pool 2 with the LP shares earned through the first 15K BOND allocation. I would like us to stake those assets ASAP to earn BOND rewards. Only 40ish weeks remain.

3 Likes

I support this proposal and would vote for it.

However, like @Bilbo_Bondbags I’d also like to know the rationale for using Optimism vs other L2s. It would be nice to setup a little table with various L2 choices and select one best for our need. I can help make one if people would use it.

I also support this proposal

Liked Tyler’s comment too. As expressed in the discord chat, we must expect some delay for large wallets to use BB products.

Aiming at other DAO’s treasury sounds like a great step toward healthy diversification in terms of targeted audience.

So let’s give it a try for ourself and “prove it out” indeed.

It would be good to elaborate on this potential risk ahead of a vote for this proposal, though I imagine that it would be likely more than offset if the pool gets a lot of activity on Optimism.

In the absence of a strong argument against it I’d be ready to support this proposal.

The community has been looking for more BOND utility and this should be a good use case look to determine user acceptance on L2. I would support this proposal for all reasons stated above. Thanks!

After talking to the community, it’s clear that everyone tends to think it makes sense for the DAO to own almost 100% of the BOND-USDC liquidity. So I think it makes sense to allocate 500k BOND for the Olympus Pro program.

Updated the proposal accordingly

2 Likes

Thanks, Pavlo. Is this going to a snapshot or a vote soon?

Yea ideal would be setting it up this week