Pylon <> Olympus Pro Partnership
Summary: We’re proposing Pylon take part in the Olympus Pro program. Through Olympus Pro, Pylon can accrue liquidity for key liquidity pairs, help diversify the treasury and create new revenue streams for the DAO.
Abstract: Olympus Pro is a bonding service that 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.
Olympus Pro helps issues with current liquidity mining:
Sell pressure caused by inflationary liquidity mining incentives
Rented or time-locked staking only delays liquidity attrition
Once the rewards of the liquidity mining dry up, liquidity providers transfer their funds elsewhere
- IL hinders users from providing liquidity
- Uncontrolled liquidity creation and selling creates volatility which makes the price discovery difficult
What are the protocol benefits of this new bonding mechanism?
For protocols there are a number of benefits. One of the primary benefits is creating a new revenue stream for the DAO. By owning their liquidity, the DAO will start to capture trading fees. At the time of this writing the 24 hour volume on the MINE-UST pair was $4 million dollars, the DAO realizes none of those fees.
Additionally, since there is no longer a need for extreme inflationary token incentives MINE 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 Pylon gain exposure to the Olympus community!
Motivation: 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 scenarios, the protocol pays out their token for individuals/entities to temporarily provide liquidity. With Olympus Pro the Pylon still pays out it’s token but receives an LP/asset in return. A win-win for both parties!
Additionally, community members that provide liquidity will not have to suffer 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 MINE in return! The MINE is linearly vested over a typical time period of 7 days.
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: A Beginner’s Guide to Navigating Olympus Pro | by OlympusDAO | Nov, 2021 | Medium
For: Create partnership with Olympus Pro
Against: Do not create partnership with Olympus Pro