The Agora Dispatch — Weekly Newsletter — Tuesday 10 January 2023
Welcome to the Agora Dispatch — news and views from the community
Summary:
- Editorial — Agora return flips markets green
- Around the econOHMy
- OIP — Zeus is Cool for new Ruler like loans
- Potted Thoughts — Better lucky than good
- OHM Bond secondary markets
- TAP-17 — AURA vs CVX
Editorial — Agora return flips markets green
On the back of Agora teasing a return markets have flipped and we are seeing some green.
We here at Agora will be back around for the foreseeable future — with a focus on proxy advice and perhaps being a delegate ourselves when Bophades (onchain governance) arrives for Olympus. For the time being expect to see some new bylines around here and some new voices on spaces and across our podcast stable (some familar ones too).
On the markets front we saw infamous crypto trader Fooo has pinned a suspected bullish tweet — after a year’s long Goblin narrative (although his alt goblin pfp army is growing)
Also in the market mix — Morgan Stanley’s Mike Wilson still sees equities tumbling 22% in the coming months — and where equities go so too crypto goes.
Will this time be different?
Around the econOHMy
Around the econOHMy we have recently seen:
- Frax launch its frxETH liquid staking derivative which just hit 50K staked ETH
- Fraxlend gOHM borrowing with $5mm FRAX for the borrowing & a current lend rate of 6%apy & borrow rate of 8%apy
- Silo & Euler on track to be the first places to allow OHM borrowing
- A FIATDAO & Barnbridge voted for a merger and are scheduled to launch FIATII which will allow releveraging and borrowing against OHM bonds
- Jones DAO on the verge of launching jUSDC & jGLP
- And of course, just in case you weren’t watching, the launch of OHM Range Bound Stability (Walls)
OIP — Zeus is cool for some Ruler like loans
Zeus dropped in from his mountain top to propose an OIP for staggered deployment of $15mm worth of treasury DAI for a simple term expiry loan protocol he has developed over the last 10 months —which would allow borrowing against gOHM with low risk and simple rates.
The project was inspired by Ruler and is dubbed ‘Cooler’ loans. A lender will specify a loan asset, terms and what collateral they are willing to accept — a borrower can then come along and permissionlessly deposit collateral and borrow the loan asset on the proposed terms. There are no oracles or liquidations if the loan is paid back by the due date with the specified interest the borrower gets their collateral asset back — if not, then the lender takes possession of the collateral.
For example, here Olympus could deposit say $1mm DAI for 5% apy interest and a 70% loan-to-value ratio for a 1 year period. Anyone could come along and get that loan term and since Olympus knows the liquid backing price of the OHM collateral will be more than the value of the loan and it can take possession at the end of the period — we would be sitting pretty with the treasury getting a cool 5% apy on $1mm DAI.
Zeus has headed off to get the Sherlock code review collective to do a final review of the contracts before this moves forward to a formal OIP!
Read the draft OIP here.
Potted Thoughts — Better lucky than good
There’s a famous scam where thousands of letters are mailed out predicting the winner of next week’s basketball game. Half of the recipients are told one team will win and the remaining, the other team. Once the winner is known, another round of letters are sent out to that half predicting whether a stock will go up or down. On and on until there are a set of recipients who have received ten correct predictions in a row. These people think they have encountered a true psychic power and are prone to hand over a significant amount of savings for whatever prediction they long to know.
How many people are out there larping as crypto analysts? How many big predictions have each of them made? Hopefully you’re following my train of thought and realize that a small number of people seem to have incredible insight into crypto markets and those people are either skilled analysts or… just making lucky guesses.
Which brings us to survivorship bias, where people believe that because they “survived” (made a large number of correct predictions) that the reasons they gave for their predictions are also correct. But that’s not how any of this works.
Price does not go up or down in response to compelling praise or criticism. A protocol might launch with an easily explainable trading strategy that guarantees good yield, and its price can crater. Someone can prove with on-chain data that a team is skimming funds and its token could moon. Praising inflation as if it’s passive income can drive a token’s price to skyrocket. Criticism of barely understood tokenomics can lead a token’s price to crash.
When you learn about something exciting or are worried about some bad news, take a quick pause and think about how many other people will even learn what you just learned, whether they’ll share your interpretation, and whether they’d make the same trade you would.
You can be right about everything and still work at McDonald’s.
You can be wrong about everything and still drive a lambo.
For more Potted Thoughts — follow @pottedthings on twitter.
OHM bonds on the secondary markets
As you probably know Olympus put to auction a fresh round of internal bonds (deposit OHM for more OHM later) which have the handy characteristic that they are tokenized — allowing for them to be bought and sold across AMMs.
These bonds were for 30, 90 and 180 day periods giving quite some time for holders and hopeful holders to trade amongst themselves for the next couple of months.
Expect to see internal bonds increase in scale, frequency and length as we progress along.
TAP-17 AURA vs CVX
Famous turtle, Olympus Council member and friend of Agora — popped his head out to propose a rebalance away from our big pot of CVX towards AURA with TAP-17.
As Ohmies would know we have a keen interest in controlling the protocols that control liquidity — for control of Curve that token is CVX and for control of the Balancer ecosystem that token is AURA.
This proposal seeks for us to rebalance towards AURA — as most of our liquidity is residing there (Balancer was chosen for technical reasons to do with RBS) — and away from CVX. It will allow for:
- Incentivizing new Olympus liquidity products and partnerships on Balancer
- Voting for protocol-owned pools and farm BAL rewards
- Gain governance influence over the Balancer ecosystem
The details are as follows:
Olympus DAO is committing to buy the equivalent of $1M worth of AURA over the next 6 months.
The total acquisition would be funded through the Convex ecosystem rewards accumulated over the past few months ($300k) as well as the recently unlocked CVX. The remaining CVX position would then be relocked.
Read the proposal here.
Till next week!
