Go2Mars Research

On May 17, Origin DeFi launched Origin Ether (OETH), an innovative yield token that uses the leading LSD as collateral. The core function of the Origin Protocol is to mint the yield stablecoin OUSD and the gain-type Ethereum derivative OETH with one click. The protocol uses a combination of different strategies to increase returns. The ve model is adopted in governance, and the parameters of various aspects of the protocol are managed by OGV (protocol governance token) stakers.

mechanism

OUSD and OETH are the core products of the Origin Protocol. Their biggest feature is to provide holders with the highest possible returns while maintaining a 1:1 anchor with the original token. OUSD is supported by USDT, USDC, and DAI at a 1:1 ratio, so the price of 1 unit of OUSD is always close to 1 USD. Similarly, OETH is supported by ETH and liquid pledge derivatives (such as stETH, rETH, and sfrxETH) at a 1:1 ratio, so the price of one unit of OETH is always close to one unit of ETH.

Attributes

OUSD:

▪️1OUSD = 1 USD

▪️1:1 backed by other stablecoins (USDT, USDC and DAI)

▪️Generate income by deploying underlying assets to a variety of DeFi protocols

▪️Elastic supply, with additional OUSD continually distributed to holders

▪️100% open source on the chain, no permission required

YES:

▪️1OETH=1ETH

▪️Backed 1:1 by Ether and Liquidity Staking Derivatives

▪️OETH earns higher returns than rETH, stETH or sfrxETH

▪️No need to stake or claim rewards

▪️OETH earns income by providing DeFi liquidity and holding blue chip liquidity staking derivatives

Buy and Sell

Origin Protocol users can upgrade existing stablecoins to OUSD through app.ousd.com, and can convert ETH or LSD to OETH through app.oeth.com. After the upgrade, users' OUSD and OETH will automatically accumulate production immediately. When users make transactions, Origin DApps will take slippage and gas fees into account and intelligently provide users with the most suitable price. This means that DApps will encourage users to buy OUSD or OETH that is already in circulation, rather than minting new tokens from the vault. DApps will deploy holders' capital into a diverse set of yield strategies that can both spread risk and rebalance over time to achieve strong returns.

Users can redeem their OUSD or OETH for the underlying collateral at any time. As with purchases, the Origin DApp takes slippage, gas fees, and vault exit fees into account and intelligently offers the most appropriate price to users. This means that DApps will often help users sell their OUSD or OETH on the AMM, rather than redeem them with the vault and incur the protocol's exit fee.

When a user redeems OUSD through the vault, the vault charges the user a 0.25% exit fee. This fee is distributed as additional revenue to the rest of the participants in the vault (i.e. other OUSD or OETH holders). This fee serves as a safety feature to make it difficult for attackers to exploit lagging oracles and prevent them from stealing stablecoins from the vault if the underlying asset is mispriced. In addition, the exit fee exists to incentivize long-term holders rather than short-term speculators. After redemption, the vault will return tokens in the same proportion as the user's current holdings. This lack of user optionality protects the vault in the event that the supported stablecoin loses its peg.

OUSD

Price stabilization mechanism

The protocol ensures that OUSD is pegged 1:1 with USD by using Chainlink’s oracle service to monitor the exchange rate of stablecoins and adjust the minting and redemption rates accordingly.

Revenue Strategy

OUSD generates income through stablecoin lending and liquidity provision. OUSD earns income through stablecoin loans from Compound, Morpho, and AAVE, and by providing liquidity from Curve and Convex. OUSD's 30-day and 365-day tracking yields remain around 4% to 7%. It is worth noting that OUSD's yield is higher than any single protocol used by Origin Dollar.

AAVE和Compound

Borrowers on AAVE and Compound provide different types of collateral, such as ETH, BTC, and other tokens to borrow assets. AAVE and Compound require borrowers to be overcollateralized, and if the borrower's leverage exceeds a certain threshold, the protocol will sell their collateral. For example, users who post ETH as collateral on AAVE can only borrow up to 82.5% of their position. If the USDC they lend reaches 85% of the value of their ETH, their collateral will be sold. Using this mechanism, OUSD lends stablecoins on the platform to earn returns and distributes them to OUSD holders. These returns come from interest and fees generated by stablecoin pools on Aave and Compound.

Curve (CRV)和Convex (CVX)

Liquidity providers on Curve allow traders to swap assets for a fee, such as DAI, USDC, or USDT. Curve also rewards liquidity providers with CRV tokens. Convex is Curve's yield optimizer, which gives priority to obtaining CRV tokens. Liquidity providers can stake their Curve positions on Convex to receive enhanced rewards and CVX tokens. In return, Convex receives a certain percentage of CRV token rewards. OUSD acts as a liquidity provider for DAI, USDC, USDT, and OUSD, collecting transaction fees and selling CRV token rewards for more stablecoins. Through the above protocols, users obtain token rewards and fees.

YES

Revenue Strategy

OETH's yield is generated in a similar way to OUSD, using collateral to earn yield from various sources. By default, OETH held in smart contracts does not earn yield, and the yield on these tokens is rerouted to the wallets of ordinary holders. The main difference between OETH and OUSD is that OETH also earns yield from Liquidity Staking Tokens (LST).

▪️Validator Rewards

▪️Transaction fees

▪️Bonus Tokens

By holding stETH and staking frxETH, Origin Ether increases its ETH balance through staking rewards. OETH also benefits from the appreciation of Rocket Pool ETH (rETH), which also gains value from validator rewards. By holding a basket of liquidity staking tokens, Origin Ether optimizes validator rewards while providing users with a diverse liquidity staking entry.

Origin Ether earns additional returns from its Convex AMO strategy. OETH collateral is used to provide liquidity for OETH-ETH pools on Curve and Convex, allowing holders to earn higher returns from trading fees on these liquidity pools. Finally, OETH earns returns from accumulating reward tokens, starting with CRV and CVX.

Tokenomics

The initial circulating supply of OGV tokens is 1 billion OGV, and the initial total supply is 4 billion OGV, which will be fully distributed after four years.

The initial distribution of OGV tokens is divided into:

▪️25% airdropped to OGN holders

▪️1.25% pre-launch liquidity mining activity

▪️25% Future Liquidity Mining Incentives

▪️10% USD holders

▪️10% Current open source contributors

▪️10% Future open source contributors

▪️18.75% DAO Reserve

The vast majority of tokens are distributed to parties not controlled by Origin, thus effectively preventing Origin or its entities from gaining control of voting rights.

Origin Protocol has not participated in any private or public fundraising for OGV. The token was launched to the community in July 2022, and most tokens will be distributed to OUSD holders, OETH holders, and liquidity providers over the next few years.

Vote-Escrow OGV （veOGV）

OGV holders can receive veOGV through the OETH staking protocol, while veOGV holders earn protocol revenue and control token rewards obtained by the Origin Ether protocol. The OETH protocol will extract a 20% performance fee from the income obtained by OETH. This fee will be used to obtain CVX tokens, effectively reinvesting in the protocol through the increasing amount of CVX and CRV rewards passed to the OETH-ETH curve pool. This greatly improves the yield of the Origin Ether AMO strategy and the pool of funds deployed by OETH.

Under decentralized governance, veOGV holders can choose to change the percentage of protocol fees, directly denominate OGV stakers, or acquire new tokens for the Origin Ether protocol. Protocol revenue can also be used to repurchase OGV for distribution to veOGV holders.

The amount of OGV coins obtained by staking veOGV’s OGV depends on the amount of OGV staked and the length of time the tokens are staked.

Team Information

Origin Ether was created by Origin Protocol Labs and is managed by the existing community of OGV stakers. Origin was founded by Josh Fraser and Matthew Liu, and later joined by PayPal co-founders, Coinbase, Lyft, Dropbox, and Google executives, as well as many top engineers from web2 startups, to build Origin Protocol.

Origin's main investor is Pantera Capital, the world's oldest cryptocurrency fund. Other notable investors include Foundation Capital, Blocktower, Blockchain.com, KBW Ventures, Spartan Capital, PreAngel Fund, Hashed, Kenetic Capital, FBG, QCP Capital, and Smart Contract Japan. Notable angel investors include YouTube founder Steve Chen, Reddit founder Alexis Ohanian, Y Combinator partner Garry Tan, and Akamai founder Randall Kaplan.

Summary

As a new member of the LSDFi track, Origin Protocol is using a variety of profit strategies to enhance its profits. The already "volleyed" LSDFI track has added another member, and the liquidity competition between xETH has become more intense. But if we think carefully, in the LSD War, the real winner may never be on the battlefield.