[FIP - 364] Add a new market into Fraxlend on Ethereum (wOETH/frxETH)

Author

Peter, Origin Protocol core team

Summary

The proposal aims to incorporate a new market into Fraxlend on Ethereum mainnet with the following specifications:

Asset Collateral Rate Type Chain Max LTV Fraxlend Pair Address
frxETH wOETH Variable Rate V2 Ethereum TBD TBD

Motivation

The proposal seeks to introduce a new market into Fraxlend on Ethereum for wOETH.
The new market would lead to increased TVL for Fraxlend, additional revenue to the Frax Protocol and DAO from active loans and liquidations, and will attract a wider user base.

Background

Origin Ether (OETH) was launched in May 2023 and is an ERC20 that generates yield while sitting in your wallet. Similar to stETH, OETH yield is paid out daily and automatically (sometimes multiple times per day) through a positive rebase in the form of additional OETH, proportional to the amount of OETH held.

Until a recent proposal, OETH was an LST aggregator that earned yield by tapping into blue-chip protocols while being collateralized by other LSTs. Over the next few weeks, OETH LST collateral will be divested back to ETH, as OETH will be transitioned into a full-fledged LST. OETH will soon become a superior LST with an extremely tight peg (1:1 redemptions to ETH thru Origin’s ARM) and high yields thanks to a combination of the OETH AMO and DVT direct staking through SSV/P2p.

OETH is heavily audited by OpenZeppelin, with audits being conducted quarterly. Previous audits can be found in the OETH docs here. OETH pricing can be determined using the OETH/ETH Chainlink, Dia, or Tellor oracles.

wOETH is a ERC-4626 tokenized vault designed to accrue yield in price rather than in quantity. When you wrap OETH, you get back a fixed number of wOETH tokens. This number will not go up - you will have the same number of wOETH tokens tomorrow as you have today. However, the number of OETH tokens that you can unwrap to will go up over time, as wOETH earns yield at the same rate as standard OETH. The wOETH to OETH exchange rate can be read from the contract (function number 16), or via the OETH dapp.

wOETH contract address: 0xDcEe70654261AF21C44c093C300eD3Bb97b78192

Current exchange rate as of 6/5/24: 1 wOETH = 1.09228118 OETH

A frxETH/OETH Curve pool is currently available with $250k+ of available liquidity: curve.fi/#/ethereum/pools/factory-v2-353/deposit

Options

  • For: Deploy mentioned lending pair on Fraxlend in Ethereum mainnet

  • Against: Do nothing

1 Like

When are async withdrawals planning to be released?

I see mention of it “coming very soon” on the orgin docs

Hi @tom2o17

The OETH ARM is planned to be released alongside the simplification of OETH, which should be in the next 2 weeks. Until then, OETH can be redeemed for ETH at a rate of 1:0.999

Hi @pete,

Thanks for the reply. I am more interested in the async withdrawal mechanism, as this will allow for users to take a duration trade in the event of on chain liquidity being depleted.

Any insight or alpha would be appreciated.

This proposal is up for voting here: Snapshot