FIP-51 OlympusDAO OHM-FRAX Uni v3 Gauge

yes they have bonded a few million FRAX and bond in a few hundred thousand more each month… but i dont see why this is relevant, we are just one of many assets they are using if anything we are the asset they use the least.

The incentives will come directly from the emissions wallet. A total of $0 will come from OHM.

The only people in the pool will be OHM protocol, because retail investors will get raped by the 900% inflation on the OHM holdings. The OHM protocol does not need to worry about the inflation as its only worried about getting more funds in to the OHM treasury.

I would have no problem with OHM having a pair in the gauge if they made it a viable option for retail investors also, to do this they would have to reward the OHM in the pool at the same rate as they reward the OHM staked on the OHM platform. Anything less then this just makes the pool useless to anyone thats not the OHM treasury.

The whole point is that it goes to back the OHM token further, very similar to what CVX does. However, C2tP-C2tP and the convex finance group want to control as much of the supply as possible to bring value to the CVX token. It seems that an equitable resolution is not going to be achieved here.

When a single protocol owns the majority of the supply it makes it hard to pass a governance proposal if it goes against their financial interest.

this is the FRAX governance , the point here is to propose ideas that are good for FRAX. you only seem to be talking about why things are good for OHM.

See I think the difference here is that that loop feeds into the backing of the OHM token. This is compounded by the further partnerships between both protocols as well as the power of POL. Can’t really say the same for Convex Finance outside of having deeper liquidity that is only prevalent due to reward emissions. Actually, there isn’t much of a difference between the two except the additional partnerships that Olympus has made with Frax Finance.

Yes but Olympus is a supply sink for FRAX, Olympus Pro, stablecoin partnership and continued utility for FXS to partners trying to enter into the frax ecosystem.

OHM holds far more DAI then it does FRAX, how much does the DAI protocol pay to OHM treasury for its sink hole?

You put a lot of weight on the partnerships OHM has introduced in to the FRAX ecosystem, now can you give the details on how having a gauge pair will improve anything that’s related to getting a new partnership and how a lack of gauge pair has hindered OHM from getting a partnership in the past.

Sparkes means well and is just trying to protect Frax - I think OHM’s model of POL liquidity presents a difficulty here.

Olympus should think about making a new proposal to come back with some guaranteed liquidity level and maybe a commitment for bonding in some FPI (things it would be doing anyway I expect) - to put concerns to bed about its commitment to long term Frax ecosystem.

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The liquidity level wont matter as OHM treasury will be the only people in the pool.

Think about it, if OHM has a 900% inflation and you put $100 of ohm + $100 of FRAX in the pool then your going to lose $90 (45%) of your assets each year due to the OHM inflation, so the pool would have to pay around $90 (82% APR) just for you to break even.

So no other investors are ever going to be in the pool.

The way to solve this is to pay the investors in the pool the same rate of inflation that OHM pays its other stakers.

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I never said Olympus has been a net negative or neutral to Frax. In fact if you look at my post history I’ve said literally the opposite on earlier OHM related proposals and supported the FXS-OHM token swap.

However just because it’s possible For OHM and Frax to have a fruitful partnership doesn’t mean every proposal is necessarily a good idea or beneficial for Frax.

I’ll reiterate: this proposal is a simple value transfer from Frax to OHM. It is $ coming out of Frax’s treasury and going to OHM’s. That’s it. You say the OHM-Frax pool will increase over time, and this might be true, but there is 0 in this proposal as stated that would would incentivize that growth.

Tbh I almost find this proposal slightly offensive. I support a long-term, mutually beneficial partnership between Frax and OHM and think that sort of partnership is definitely possible. That being said though a partnership has to be based on mutual support and this proposal as described offers absolutely 0 benefit to FXS. There isn’t even the baseline of offering some OHM rewards which would at least make it possible for new stakers to enter the pool outside of OHM POL.

I guess on some level it’s understandable as I do expect protocols to act in their own interest and this passing is very clearly in OHM’s interest, but out of respect for the partnership and sign of goodwill I would expect at least something being offered that could possibly also be in FXS’s interest and as stated this proposal has nothing.

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As @sparkes25 said , providing liquidity for FRAX-OHM is a losing game given the high (+900%) APY you get on OHM staking. Better would be to provide liquidity for FRAX-gOHM. A gauge for that would make more sense.

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Apologies for the slow update. There’s been discussion on the Convex side and just wanted to recap now what the current stance is and why we voted “no” to the gauge proposal.

As per the Proposal, the benefits of the gauge are as:

  1. Olympus Dao gets more fxs
  2. Grow partnership
  3. In the future benefits will be created.

Response:

  1. Yes Olympus Dao will get more fxs, in fact will probably get close to 100% of this gauge’s emissions

  2. Ok great. Where does that fit into the gauge proposal and future of partnership? This is an all fluff argument

  3. Another all fluff argument with no indication of what, if anything, will happen in the future

So all in all the proposal is weak in and of itself. There’s no talk about what’s the advantage of the pool, how the gauge will be used for frax’s benefit, how much liquidity will be created, what kind of future defi lego will fit into it, etc etc. There’s nothing there. In fact the only concrete thing listed is that Olympus Dao will get more FXS.

Other concerns and things that I felt were portrayed as dishonest. (Maybe dishonest i the wrong word here as I don’t think they were said with ill intent)

  1. Mentions of “deep” liquidity with a 6m pool. Maybe there’s something else I’m missing but the current Ohm/Frax pool is barely a pool at all. 6m is nothing so where is this “deep” liquidity?

  2. The argument I saw against POL receiving all the rewards was “It’s an open pool, anyone can join thus it’s okay”. While yes it is open, an efficient market would never see anyone provide liquidity to this at mass since the staking incentives of OHM far outweigh that of the gauge. So using the “anyone can join” defense felt like it’s dodging the concern.

That being said, I still think it’s possible for a gauge if we properly address some issues.

For example the big POL concern. While some may try to say “it’s the same as frax” even though its quite different, lets try to look at this pool specifically. FXS gauge emissions have a goal to increase FRAX liquidity. A pool owned 100% (or close to that, lets just say 100 for now) could create less liquidity per FXS. This is an inefficient setup for increasing liquidity. Why? because if staking rewards are 900% on ohm, then the pool could have anything lower than that and people would still choose ohm staking. So if a farming market says X amount of rewards brings in Y liquidity (+/- based on risk etc), this pool could undercut the amount of liquidity and still receive the same amount of rewards and thus use left over liquidity elsewhere. There’s nothing forcing them that like “they must stake XYZ amount per FXS”. It’s possible they could stake a market competitive amount, or they could even be nice and stake more. But contract wise, there’s nothing that forces them to be a “good” source of liquidity.

Thoughts on Olympus putting weight on the gauge which just feeds back more FXS to them and getting compound interest? It might sound a bit iffy at first but in the end all this means is that Frax Finance is paying Olympus for some sort of service. So the question is are we getting something for this service? Are we paying for inefficient liquidity? What’s the deal?

So that’s all I want to see. Why should the Frax DAO put Olympus DAO on the payroll so to speak? I don’t know what Olympus has in mind for the future but I’m sure they can come up with lots of things that makes this deal more palpable. They may already have a bunch in mind, but I cant see it and I can’t just sign for a blank check without knowing what we can get out of it.

tldr: I think the gauge should wait until we see some more concrete plans/actions in return for the emissions.

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I wanted to bump this proposal to potentially have it put up as a new vote in a couple of days if the following amendments can be made:

1.) Change the proposed pair to gOHM-FRAX
2.) Make the venue for the gauge Fraxswap

Essentially make FIP-51 a proposal to deploy a gOHM-FRAX gauge on Fraxswap.

I would personally heavily support this as a revote. We’d love to get our Ohmie friends get a great venue to deploy their liquidity, get familiar with Fraxswap and TWAMMs, and start building together again like last year. It would also be a fantastic way for Olympus to earn some juicy FXS yields, make use of their whitelist slot to get boosted APRs, and start working with Convex etc.

What are everyone’s thoughts on this?

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I support. Would be an awesome early pair to have on Fraxswap.

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changing this to a gOHM pair would make this proposal far more attractive.

having the pair on FRAXswap would also help FRAX build liquidity.

i would support this proposal if these changes where made.

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i think even taking this a step further - offer olympusdao a small kickback on fraxswap fees to migrate all liquidity operations to fraxswap. more revenue for both frax and ohm. why perform any liq ops on uni or sushi when both frax and ohm stand to gain more in fees by utilizing fraxswap?

Not only is that possible but it technically is already true. There are no admin fees on Fraxswap. It is entirely like Uniswap. The LP gets all the fees so if Olympus is 90%+ of the liquidity with POL, it will be getting almost all the fees. But ya, we can create an exclusive offer to them as well that admin fees for gOHM pairs go to Olympus DAO. Great idea :slight_smile: I’ll add it as an amendment to the snapshot on revote.

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Sam, we should connect to discuss this further. We may need to rewrite the proposal to be inclusive of potential opportunities and to be more mutually beneficial to both ecosystems. For example, Olympus launched mint and sync which allows for the third party liquidity providers to have resistance to dilution.