Olympus Flex Bonds

Summary

BarnBridge proposes to swap ~$500k worth of $BOND for $gOHM to hold as treasury holdings and pair it against OHM in an OHM/BOND Balancer Finance pool.

Motivation

With much of BarnBridge V2 being inspired by the concepts around protocol owned liquidity/assets, we’ve worked behind the scenes with the Olympus team to figure out where we can align together. The first of these proposals is to be seen as a valid partner for Olympus DAO’s incurDebt() function. Since rebranded as flex loans, these allow listed partners to a) collateralize $gOHM with the Olympus DAO treasury, and b) mint $OHM-denominated debt up to 100% LTV against the position.

I also want to highlight the 0% interest rate and no LTV-triggered liquidations (LTV% drops over time).

Proposal

We will no longer have incentivized liquidity on main net following the ending of pool 2 rewards.

OHM is an extremely liquid on chain asset so a OHM/BOND pairing would ensure we had prolonged liquidity on chain and we would own this protocol owned liquidity.

BarnBridge proposes to swap ~$500k worth of $BOND for $gOHM to hold as treasury holdings and pair it against OHM in an OHM/BOND Balancer Finance pool.

Olympus will be making Balancer their primary liquidity hub and OHM/DAI/ETH (50/25/25) the main pool.

To maximize the depth of liquidity provided by this loan, it would be deployed via an 50/50 OHM/BOND Balancer Finance pool.

This new pool would not receive any further subsidization. Moreover, as Balancer Finance relies on a singular vault architecture, this would not fragment liquidity from the BOND-ETH pool.

Reasons Against

  • $gOHM would be locked until debt repaid
  • $OHM can be only used to provide liquidity, not incentivize liquidity or acquire treasury assets

Reasons For

  • We will no longer have incentivized liquidity on main net following the ending of pool 2 rewards.
  • Opens up the possibility for future Olympus DAO support in Balancer governance
  • Loan could prove to be self-diluting
  • Balancer liquidity will allow us to utilize AURA bribes to maximize depth in liquidity like we are doing with Velodrome on Optimism.
5 Likes

Just to be clear. Equal $500K swap BOND for gOHM.

With the pairing being 80/20 BOND/OHM that means $2M BOND will be required if we pair the full $500K OHM?

1 Like

As a member of both communities I’d be voting in favor of this as well.

With 100% LTV , 0% interest and no liquidation risk this Flex loan is a fantastic offer. A balancer pool will allow us to accumulate BAL and have more leverage in governance. Boosted pools on Aura are also available along with bribes via Hidden hand.
Will definately support this!

3 Likes

I copied the 80/20 from FIAT and meant to delete. We are more liquid than FDT so I think we do 50/50.

EDIT: Corrected in final post.

3 Likes

Yes I didn’t want to add that part because it complicated things but you have a solid idea of where this is headed at least. :grinning:

1 Like