This is a forum post to discuss the pros and cons of a proposal to implement a bond program for Ooki DAO to own it’s liquidity using Olympus Pro.
Protocol owned liquidity is the future of liquidity incentive programs. By implementing an OOKI-ETH bond program on Olympus Pro, OOKI DAO will be able to distribute OOKI tokens to more users, while accumulating it’s own liquidity.
The proposal to integrate with Olympus Pro would sell OOKI at a discount in exchange for OOKI/ETH SLP tokens. The bond discount rate is set by the market. Bond prices are decreased incrementally over time until a bond is purchased which then pushes up the price of the next bond.
Ooki DAO will be featured on Olympus Pro dashboard, a unified marketplace for bonds from a multitude of protocols. A presence on this interface will be invaluable in reaching new investors, much like the value of listing on an exchange.
Olympus Pro provides a service offering expertise in bond contract management to support DAO’s, such as OOKI DAO, who are interested in owning their own liquidity. This service includes providing the UI for bonds and maintaining bond control variables to balance emissions with liquidity accumulation.
In exchange for the implementation and community engagement, Olympus would take a 3.3% on all OOKI bonds sold. Olympus will use the OOKI earned as backing for the intrinsic value of OHM, which would act as a supply sink for OOKI.
OOKI bonds would be offered with a week-long vesting period, which helps prevent immediate price impact from discounted tokens. This aligns the goals of the protocol with those of bond participants. Typically, higher bond volume is seen when users expect the price of the token to increase during the vesting period.
To participate in the OOKI Olympus Pro liquidity program, this proposal requests OOKI DAO approve allocating $1.5m of OOKI for SLP.
The $1.5m worth of OOKI Tokens would be used for protocol owned liquidity through the Olympus Pro bond offering. This would target $667k liquidity purchase per month over the next three months. Ooki would generate onchain revenue from LP fees generated as an owner of this liquidity.
Program Success Metrics:
• Discount rate < 10% on bonded OOKI
• Minimal impact on OOKI price
• Permanent liquidity source
• Increased treasury value from liquidity that also earns trading fees
• Exposure to paired asset in liquidity pool (ETH)
• Ooki DAO can stake its LP tokens to provide additional runway
If consensus is achieved to proceed following forum discussion this proposal will progress to Snapshot vote for offchain voting and if it passes then to onchain vote.
This proposal has been submitted for onchain vote and was bundled with a few other governance proposals including: