by 0x76fb13f00cdbdd5eac8e2664cf14be791af87cb0 (Matimio)
This proposal was drafted by the Olympus DAO Partnership Team in coordination with the Decentraland DAO Facilitator. The DAO facilitator’s support in the drafting of the proposal is not an endorsement. This is a Draft Proposal, and will require 2M Votes to be promoted to the final voting stage.
We are proposing that Decentraland DAO participate in the Olympus Pro program. Through Olympus Pro, Decentraland can diversify the treasury, accrue liquidity for key liquidity pairs, and create new revenue streams for the DAO.
Olympus Pro is a bonding service which allows partner protocols to acquire liquidity on token pairs while offering users discounted tokens in return. At the time of writing, Olympus Pro has helped over 24 protocols amass over 16M worth of liquidity.
What are the protocol benefits of this new bonding mechanism?
For the protocols there are a number of benefits. One of the primary benefits is creating a new revenue stream for the DAO. By owning the liquidity, the DAO will start to capture the trading fees. At the time of this writing the 24 hour volume on the MANA-ETH pair was $4 million dollars, the DAO sees none of those fees.
Additionally, since there is no longer a need for extreme inflationary token incentives MANA will have a protected liquidity floor. This helps to protect from illiquid markets and creates a better trading experience for token-holders due to minimal slippage.
Finally, the Olympus Pro program helps Decentraland gain exposure to the Olympus community! Decentraland and Olympus are two of the biggest communities in the Metaverse and DeFi industry. We believe it would be the perfect partnership to broaden both communities and to create a truly powerful decentralized ecosystem for both Olympus and Decentraland.
What are the benefits for the community?
Gives the community the opportunity to buy discounted (~5-10%) tokens in exchange for providing the protocol a liquidity position. This provides a truly positive sum interaction between the protocol and community. In typical liquidity mining the protocol pays out their token for individuals/entities to temporarily provide liquidity. With Olympus Pro the Decentraland still pays out it’s token but receives an LP/asset in return. A win-win for both parties!
Additionally, the community will not have to suffer through impermanent loss. Impermanent loss describes the temporary loss of funds occasionally experienced by liquidity providers because of volatility in a trading pair. With Olympus Pro they simply provide an LP position to the protocol and receive MANA in return! The MANA is linearly vested over a typical time period of 7 days - meaning the discounted MANA accrues over a 7 day period, and can be used freely at the end of this period.
How can it help Decentraland?
Controlling Decentraland’s own liquidity will support sustainable growth and can create new revenue streams for opening reward emissions for its users.
Increased revenue streams for the further development of the protocol. For example, on December 6, trading fees on X for the ETH-MANA LP pair were $12,060 USD. If Decentraland owned the liquidity for this pair, these fees would go to the DAO treasury.
Removes the need to create high inflationary rewards for liquidity mining
Allowing multiple bond pairs with MANA (reserve or LP) would diversify your treasury, thus allowing for more complex DeFi strategies to create sustainable growth that is essential for these protocols to keep incentivizing users to play the game
Controlling your own liquidity decreases your dependency toward financial backing (VCs, private investors, etc) and gives more power to the DAO and its community
The tokens which Olympus earns as fees (3.3%) will never be sold and the community is willing to delegate the governance to entities voted on by the decentraland community
Potential integration of Olympus within the Decentraland metaverse
Current status of the Olympus Pro Program and it’s partners:
We have over 24 deployed partner projects on Olympus Pro with over 100 pending applications
Some notable bond contracts which have amassed large amounts of total bond volume (TBV) are:
Alchemix - $4.37M
Frax - $1.97M
Pendle - $1.52M
Shapeshift FOX - $933K
Stake DAO - $877K
Olympus Pro: https://pro.olympusdao.finance/
A Beginner’s Guide to Navigating Olympus Pro:
For: Create partnership with Olympus Pro
Against: Do not create partnership with Olympus Pro
- For: Create partnership with Olympus Pro
- Against: Do not create partnership with Olympus Pro
- Invalid question/options
Vote on this proposal on the Decentraland DAO