Ribbon DAO Covered Call Strategy to Diversify OOKI Treasury

Ribbon.Finance offers a variety of options products to generate yield. One of their products are covered calls. Covered Calls are one of the most popular yield strategies in tradfi — they allow people to generate income on their assets by selling upside volatility. Ribbon.Finance recently introduced a new product available to DAO treasuries which would allow them to diversify their treasuries using covered calls.

The call options that are periodically sold through this strategy are auctioned to the public via a Gnosis Auction (as per how Ribbon V2 works). Ooki through Ribbon would be utilizing Wintermute to act as the market maker for this strategy to participate in these auctions, but the auctions are fundamentally open to anyone with an Ethereum address.

If this proposal is approved, Ooki will be working very closely with the Ribbon team to design a strategy with parameters that best suit Ooki DAO treasury needs.

This proposal would allocate approximately $5m worth of OokiDAO’s treasury towards a monthly expiration covered call strategy on Ribbon.Finance. The Price of the OOKI monthly call option would be:

OOKI-20211231-0.45-C bid=0.0087 USD

If we assume that it’s $5m notional = 17M OOKI
0.0087 * 17,000,000 contracts = 147,900 USDC

The estimated monthly yield = 3% on OOKI terms or approximately 36% APY .

Utilizing this strategy would benefit Ooki in the following ways:

  1. This would help grow and diversify the OokiTreasury.
  2. Generate another source of protocol revenue.
  3. A portion of the funds generated through this strategy could be used to grow the protocol in a number of ways including for example purchasing more OOKI to use for votium bribes , or to incentivize Curve Factory Pool Liquidity, or also assisting with compensation plan.
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great post! ill support this proposal

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I’m against.

  1. OOKI should avoid dubious collaboration with a project that has not been tested by time. Also with projects that have a tarnished reputation https://cryptobriefing.com/divergence-ventures-analyst-exposed-farming-airdrop/

  2. yes, today is hard time for ooki since history, and that’s why ooki project have to avoid any collaborations with risk > 0.0001% to get into new troubles. cuz new trouble will make final shot, dead shot.

  3. as i understand from presentation the main idea of Ribbon.Finance - to unlock some part of tokens for trade and of course for SHORTING. it will cut organic/natural growth of ooki token price. it’s will be new control lever. u will say “it’s b2b trading outside public open market”… and i will say ok, so instead to let community and holders sell their ooki for bigger/market price, DAO will sell someone ooki with discount. Great…

  4. better unlock some OOKI tokens from OokiTreasury and spend on real marketing with real influencers, cuz there is still no promo from real crypto influencers. It will make more yield for OOKI project than weird financial schemas.

p.s.
and in other words, Ribbon.Finance is a mosquito that drinks blood from other projects, and don’t care about their future. I’m against OOKI became a donor. OOKI is a great standalone project with big future. there is no place for parasites. Ribbon.Finance has own community and investors, and their mission to make them rich, they don’t care about financial position of their donor’s community. Think about it.

So plz, stop find weird ways to fast fixing financial problems. Better focus on main roadmap and marketing.

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and generally it contradicts the idea of the project. since dex fights with kyc and manipulations (frank and farz can confirm it since they repeat this many times in telegram channel).
And u offer to have a deal with a 3rd party project for price manipulation. it’s funny

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and thx God im not from those people who invest in ooki when bzrx price was 0.4 or even 1$.
BUT. BUT. BUT…“OOKI-20211231-0.45-C bid=0.0087 USD” ???
where is respect for those people? since current price they are literally long term investors.
is it normal to write price of ooki token 0.0087 when a lot of people have spent 0.1 for it??
is that official price now? is that why listing price was 0.005? DEV and some early buyers rdy to sell tokens for 0.0087?

of course this topic isn’t for price discussion and there is no place for fud. But it wasn’t me posting price 0.0087 for OOKI.

I saw a lot of people in tg channel who bought 0.3-1$ brzx. and I can imagine their feelings when they see such prices. Hope that it was just typo mistake and you wanted to specify a price 0.087 or even 0.87 :smirk:

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These quotes were given based on BZRX and are not finalized offerings. It is only an example of a quote given. Also, these are options contracts so the pricing at $0.0087 for $0.45 strike price calls 30 Days Till Expiration when underlying was at roughly $0.32-0.34 is fairly good pricing. Ribbon Finance did not do anything wrong and does not have a “tarnished reputation”, but rather an individual at the VC used the disclosed information that an airdrop was going to occur and utilized the protocol significantly to get a larger airdrop. Using the treasury to sell covered calls allows for yield generation and a simple process for diversifying the treasury if the price rises to where the calls are to be exercised. This yield generation will allow for the financing of many future expenditures and is all-around good for the protocol. Openly selling OOKI in the treasury to partake in dealings would result in selling at current prices with worse execution, no yield generation on assets, and the treasury would not be diversified.

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ok other source: Airdrop Ethics: VC Firm Draws Ire Following $2.5M Ribbon Finance Exploit

A Ribbon Finance representative declined to comment. Divergence Ventures did not respond to a request for comment by press time.
There was a lot of speculation of insider information between team and investors

and now about financial scheme and mathematic, u just confirmed what i said. Nice… seems small group of early investors decided to play their own game.
stop talk about virtual benefits, better answer on questions, why have u decided to start collaborating with price manipulators?

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Again, Ribbon Finance did nothing wrong and only disclosed with investors that an airdrop was going to occur. They did not actively engage in manipulation, gaming, or any other misconduct. The VC used the disclosed information to partake in activities that would be profitable for them.

Utilizing financial products for the benefit of the protocol is something that should always be looked into and researched. It strengthens the protocol in the long term as it allows for a more sustainable treasury, funding, and availability of funds for expenditures. If you do not fully understand how options work, what covered calls are, and how this proposal intends on utilizing it please research these topics before commenting as there are significant benefits to it.

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again, stop skip mathematic and financial scheme. u preposition is to unlock dao tokens and short the market. that is Ribbon Finance strategy. and i will repeat question, ARE U FO REAL??? dex will collaborate with price manipulator? for what is it? for what this perfomance? do it simple, just unlock dao tokens and sell it without Ribbon Finance. same action without 3rd party. no need to pay commission.
seems u don’t believe in OOKI project and just want to turn on cheap monetization. I

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I support this proposal and believe it is fair pricing on the contracts with the IV being around 120%. The yield generated from this will allow for growth of the treasury and if the calls are to be exercised, the treasury will become further diversified which is also beneficial for longevity as a diversified treasury increases the ability to fund new initiatives in the future. The size of the expected outstanding contract size as a percentage of the treasury is also not too large which is important as it maintains exposure to OOKI as the majority of the treasury.

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in other words, instead of developing OOKI project and doing marketing promotions u decided to cooperate with price manipulator, unlock dao tokens and start periodically short the market (that is mega “trading strategy” from ribbons.finance).
instead of attracting new people and increasing TVL you prefer just sold out. It looks like u give up, and don’t want work under project, but have 1 big problem - WHERE TO GET MONEY? yes? no people, no TVL, no fees. SO where to get money when LOCKED COINS only can give staking fee? what to do? Of course unlock coins and start sell them… officially. And it will be named “Diversify OOKI Treasury”.
If u want to exit from project, just make grand opening sale instead this weird scheme.

Once again, your proposal is against ideology of DEX project. Your proposal is Unlock part of DAO and short the market.

The only one reason to make this proposal is someone or group of persons who want to exit from project and get their money asap. There is no other explanation of why you are trying to promote this idea. Cuz ur proposal will ruin organic market price.

Anyone can read about Ribbon.Finance “trading strategy” where clearly and latterly said principal scheme of this method. Don’t try to fool.

Just no comments…

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I see 2 different approaches, two people with a lot of knowledge but 180 degrees opposed to each other. I do not understand all of the technical aspects but i do see that okgoogle speaks with his heart and believes in what he says so we need to look at this from both sides, i am not enough of a financial genius to contribute, hope others will.

Hi dude,

First, welcome to the Ooki project - it’s good to have new people and new people with strong opinions and interest in the project are great.

Now you’re clearly against this idea and I’m trying to understand why.

  1. You seem to think the Ribbon Finance team is somehow shady and we shouldn’t associate with them based on the airdrop fiasco. Can you explain why? My understanding of the airdrop thing was that one of their VCs was airdrop farming (and returned the money later anyway). What did the team at Ribbon do (if anything)?

  2. You also (if I understand correctly) think that we’d be better off focussing on marketing instead of doing this - but marketing is already happening in a bunch of places - in fact there is literally a big billboard with Ooki on it in Times Square in New York City right now. So it seems to me that we can do both.

  3. You also seem to think that the team are somehow unlocking Ooki tokens and selling them - can you explain why you think this? Why does selling options on Ribbon Finance for income (which will go to the DAO not the team members) amount to selling tokens? It’s selling OPTIONS on Ooki tokens, not the Ooki tokens. It’s basically no different from selling options on Deribit or a DEX like Opyn.

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Hello Badri, no problem.

  1. they had to return the money since the secret was revealed by attentive analysts. And I know a lot of how IDO works, how IDO market works. One of CEO of such ido platform gave an interview and told about all manipulations from start to the end of listing, and how it works. And the main thing, that it is not so important aspect “about Reputation” to pay attention, since it’s not main problem. And the main message about this was to choose partners without any mentions in bad news.

  2. “in fact there is literally a big billboard with Ooki on it in Times Square in New York City right now”. I don’t want to say anything bad to current marketing team, since I bet, they are preparing some surprises and better wait instead argue… but, you know, Badri, for example, it is not the best idea to advertise pork in Eastern countries where pork is not eaten. Do u understand what I want to say?
    I will explain u more, by marketing and traffic arbitrage language. There are some of terms:
    CPA (Cost Per Action) is a payment model when the publisher receives income for certain actions of website visitors.
    CPL (Cost Per Lead) is a payment made to the webmaster for a lead or relevant user information.
    CPS (Cost Per Sale) is a payment made to the webmaster for a sale.
    CPC (Cost Per Click) is a payment model when funds are being debited per click on an ad.
    PPL (Pay Per Lead) is the same as CPL but for the advertiser.
    PPV (Pay Per View) is pay-per-view advertising.
    ROI (Return Of Investment) is the return of the publisher’s investment. It shows the ratio between the ad costs and the profit received and expressed as a percentage.

A lot of youtube crypto influencers with tons of subscribers can help to promote real and good project (not scam) even for free. They interesting in REAL AMA on live video streams. And i don’t know how much marketing team spent money for the adv on billboard, but I 100% sure, that they also waste their energy and TIME. Money, energy and time could be focused on more productive ways of marketing where ROI would be disproportionately more. I don’t understand why there is still no good collaborations with influencers that have a hundreds of thousands subscribers (potential users and investors of OOKI)

  1. I’ve already explained the financial scheme. U can also read Ribbon Finance presentation by urself. U can name it Options, Treasury, LUCK or anything else, but it will not change the principal and sense of their method. I became little angry and sad, when people ask me “why do u think it’s snow” when i tell them “look, it’s snowing”. Badri, open link that 1st post provided - Ribbon Treasury. Introduction | by Ribbon Finance | Nov, 2021 | Medium
    What don’t u understand in next paragraphs?
  • There must exist perps for the token on a CEX so that market makers can hedge easily
  • DAO should be willing to deploy between $1-$5 million of their native token into Ribbon Treasury

And there is even no hidden sense, Ribbon Finance literally tells what they will do in cooperation with dao with this tokens. Do u really need full detailed explanation of their offer from their presentation? I bet u can read and understand by ur self.

And main question is, why do some people try to push this issue forward since it’s price manipulation scheme with dumping pumps. Does OOKI want to collaborate with project that aims to get money from donor’s community? In other words, Does OOKI against their investors? If u don’t understand what i mean, better read Ribbon Finance presentation. It’s just legal approved robbery of holders and traders

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There are 2 types of people who don’t understand:

  1. who really doesn’t understand
  2. who pretends not to understand, because they pursue selfish goals

rly hope that there is no one from 2)

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I fully agree with okgoogle.

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Nice work Go on. And keep on going

I fully support @Drypto on this one. This is a great way for the DAO to diversify. without actually doing direct sell. People have to understand how covered call options works to express opinion on this subject

I do not support this proposal.

seems @roman, u don’t understand how “covered call options” work or u pursues ur selfish goals. Such collaboration is a death for project. I have made deep research about private auctions and result of such manipulations price dropping -75% for months. As i said and explained before, u don’t need to cooperate with 3rd party companies like Ribbon… u can just unlock 5 million $ in ooki, and just sell them on next pump = same strategy, same effect 1:1.
I don’t understand why do u try to fool everybody. Do u think u are so clever and other so stupid? No u aren’t.