[Origin Protocol] LTIPP Application - FINAL

SECTION 1: APPLICANT INFORMATION

Applicant Name: Origin Protocol core team

Project Name: Origin DeFi

Project Description: Origin Ether was launched in May 2023 and is an ERC20 LST aggregator that generates yield while sitting in your wallet by tapping into blue-chip protocols. OETH is backed 1:1 by ETH, WETH, stETH, rETH, and frxETH at all times; holders can go in and out of OETH as they please. Similar to stETH, OETH yield is paid out daily and automatically (sometimes multiple times per day) through a positive rebase in the form of additional OETH, proportional to the amount of OETH held.

Team Members and Roles:

The Origin team comprises deeply experienced DeFi enthusiasts that have a strong record in developing secure products that offer the easiest and most efficient way to earn a yield on ETH or stablecoins. The team is filled with talent with experience as early employees at YouTube, and engineering managers at Google, Coinbase, and Dropbox.

  • Josh Fraser - Co-founder
  • Matt Liu - Co-founder
  • Micah Alcorn - Director of Product
  • Franck Chastagnol - VP of Engineering
  • Amit Patel - Head of BD
  • Rafael Ugolini - Head of Engineering
  • Peter Gray - BD Manager
  • Etiosa Richmore - Product Analyst

Project Links:

Website: https://originprotocol.com/ and https://oeth.com/

Documentation: https://docs.oeth.com/

Github Page: Origin Protocol · GitHub

Twitter: https://twitter.com/OriginProtocol

Discord: Origin Protocol (OGN, OGV, OUSD, OETH)

Contact information:

Point of Contact: Peter Gray

Point of Contact’s TG handle: @Pgee13

Twitter: https://twitter.com/OriginProtocol

Email: peter@originprotocol.com

Do you acknowledge that your team will be subject to a KYC requirement?: Yes

SECTION 2a: Team and Product Information

The Origin team possesses extensive knowledge of developing products on-chain as the team has been building since 2017 while releasing our first DeFi product in 2020 in the form of a meta-stablecoin called OUSD.

The team decided to use a similar code to what we used to develop OUSD and launched OETH in May 2023 which has grown to a TVL exceeding $150M.

Origin Ether (OETH)

Origin Ether was launched in May 2023 and is an ERC20 LST aggregator that generates yield while sitting in your wallet by tapping into blue-chip protocols. OETH is backed 1:1 by stETH, rETH, frxETH, ETH, and WETH at all times; holders can go in and out of OETH as they please. Similar to stETH, OETH yield is paid out daily and automatically (sometimes multiple times per day) through a positive rebase in the form of additional OETH, proportional to the amount of OETH held.

OETH yield comes from a combination of:

  1. Deploying collateral across Curve, Convex, Morpho, Balancer, and Aura
  2. LST validator rewards
  3. A 50bip exit fee is charged to those who choose to exit OETH via the dapp (completely avoidable if using a DEX), this fee goes back to OETH holders
  4. OETH sitting in non-upgradable contracts does not rebase, instead the interest generated from those tokens is provided to those that can rebase

These 4 yield generating functions combined enable OETH to generate higher yields than holding any single LST or farming ETH manually. The current collateral allocation and yield strategies can be seen on-chain at all times via the OETH analytics page. Future OETH collateral and yield strategies are governed by OGV stakers. More information on OETH and its mechanics can be found in the OETH docs.

There is no set emission schedule for OETH - as with stETH, OETH is minted on demand when users lock their ETH or LSTs into the protocol, and burned on demand when users exit OETH for the collateral ETH or LSTs. OETH is completely non-custodial, there are no lock-ups, terms, or conditions. Any web3 wallet should be able to support OETH and its rebasing function, including hardware wallets and multi-sigs. There’s no need to ever again give up the keys to a 3rd party platform, such as Celsius, Blockfi, or FTX, to earn yield.

An Arbitrum exchange rate oracle through Chainlink is roughly 3 weeks from launching. The Mainnet Chainlink oracle for OETH will be launched any day now. Both oracles will help onboard OETH to lending markets as a collateral option.

What novelty or innovation does your product bring to Arbitrum?

As we have plans to bridge OETH to Arbitrum in the form of wOETH, it facilitates LST growth on Arbitrum as it acts as a yield aggregator of the largest LST on the market that allows you to capitalize on the success of all of them while receiving additional yield through the incorporated DeFi yield strategies that include Curve, Convex, Morpho, Balancer, and Aura.

Is your project composable with other projects on Arbitrum? If so, please explain:

The project will be composable with other platforms. We have plans to deploy a liquidity pool on Balancer to deepen the wOETH liquidity and then target integrations in the ecosystem for people to leverage the use of wOETH.

Do you have any comparable protocols within the Arbitrum ecosystem or other blockchains?

No.

How do you measure and think about retention internally? (metrics, target KPIs)

Daily User Growth: The daily user growth (in addresses) interacting with wOETH’s contracts.

Liquidity depth: The growth in wOETH liquidity on Arbitrum that is sticky

Daily Protocol Fee: The fee generated from the additional minting of wOETH that earns a yield

OETH Supply: The growth in wOETH TVL and deciding to hold it continuously

wOETH Peg: Ensuring our price remains stable in comparison to ETH over time

Do you agree to remove team-controlled wallets from all milestone metrics AND exclude team-controlled wallets from any incentives included in your plan:

Yes

Did you utilize a grants consultant or other third party not named as a grantee to draft this proposal? If so, please disclose the details of that arrangement here, including conflicts of interest (Note: this does NOT disqualify an applicant):

No

SECTION 2b: PROTOCOL DETAILS

Is the protocol native to Arbitrum?

No.

On what other networks is the protocol deployed?

The Ethereum mainnet.

What date did you deploy on Arbitrum mainnet?

The token was deployed on March 1st, but we have not started building any utility for it yet which is bound to happen in the coming weeks.

Do you have a native token?

Yes, our native token is an ERC-20 called Origin DeFi Governance (OGV).

Past Incentivization: What liquidity mining/incentive programs, if any, have you previously run? Please share results and dashboards, as applicable?

We are currently only running liquidity mining programs to deepen our liquidity for OETH on Curve in order to facilitate seamless swaps between OETH<>ETH.

  • Spent 2.82M OGV/week for bribing on Votemarket in July
  • Spent 8.6M OGV/week for bribing on Votemarket in August
  • Spent 7.5M OGV/week for bribing on Votemarket in September
  • Spent 5M OGV/week for bribing on Votemarket in October and November

With this bribing program, we have managed to achieve $70M TVL in the ETH-OETH Curve pool on Ethereum that provides users with deep liquidity for swaps between ETH and OETH.

Current Incentivization: How are you currently incentivizing your protocol?

  • 2.5M OGV per week (5M OGV per period) is currently being used to bribe on Votemarket to deepen OETH liquidity on Curve.

Have you received a grant from the DAO, Foundation, or any Arbitrum ecosystem related program?

No.

Protocol Performance:

OETH TVL: $180.24 M

OETH Curve Liquidity: $72M

41.2 M of the OETH TVL is in PrimeETH which is an LRT that recently was launched by the Origin team.

Daily revenue: 0.978 ETH


You can find our historical performance here: Analytics | Protocol Revenue

Protocol Roadmap:

  • Expand OETH usage and get it integrated into the Arbitrum layer 2 ecosystem by bridging it with wOETH
  • Increase utility by enabling people to take leverage against the token on Arbitrum money markets
  • Get first-class oracles to make it easier for external protocols to integrate OETH.

Audit History & Security Vendors:

OETH has been audited by OpenZeppelin and Narya. We also have a continuous auditing agreement with OpenZeppelin to review 100% of our smart contract changes. The codebase OETH is based on which comes from OUSD and has been reviewed by multiple auditors such as Certora, Trail of Bits, and Solidified alongside OpenZeppelin. All audits can be found in the OETH docs here: Audits | Origin DeFi Docs

Security Incidents:

There have never been any security incidents on OETH.

There was one incident with OUSD in 2020, before the first audit was complete. $7M USD of user deposits (including $1M of deposits from Origin’s founders and company treasury) were drained from the protocol. We put together a detailed compensation plan to make our users whole over time: Origin Dollar (OUSD) Detailed Compensation Plan | by Micah Alcorn | Medium. Since then, the OUSD codebase has undergone 10+ audits with OpenZeppelin on retainer.

On-chain insurance protocol InsurAce awarded OETH and OUSD the highest possible security rating of AAA, of which only 2 other projects on the InsurAce platform have received. Optional OETH cover is currently available for both OETH and OUSD on InsurAce. Origin Defi also maintains a $1m bug bounty through Immunefi, with a resolution time of 5 hours.

SECTION 3: GRANT INFORMATION

Requested Grant Size: 185,000 ARB

Justification for the size of the grant:

The grant will be used to incentivize the growth of wOETH on Arbitrum to facilitate the growth of LST usage within the ecosystem. The ARB will be used to boost our liquidity pools on Balancer and to incentivize future integrations such as wOETH money markets to kickstart its usage throughout the Arbitrum ecosystem.

Goal:

Achieve a TVL of $10-20 million on Arbitrum and encourage the expansion of LST on Arbitrum by promoting users to bridge funds from the mainnet, thereby enhancing their utilization within the Arbitrum ecosystem.

Assuming Arbitrum trades at a value around $2, we would ideally use 75,000 ARB to incentivize our wOETH-ETH pool to sustain a >5% APR until the pool reaches >$10M TVL for liquidity providers to make it enticing for them to support wOETH growth on Arbitrum.

Grant Matching:

Before the start of the LTIPP we will seed the LP with $100,000 worth of wOETH-ETH POL to kickstart the growth. However, these funds will be excluded from the ARB rewards received in the case of admission.

We will continue to facilitate the pools with incentives by bribing on Hidden Hand to support the liquidity mining as well. These bribes would equate to $1000 per week while the pool TVL is lower than $1M and scale with it as it grows to sustain the advertised APR. Considering Aura has an emission/$ ratio of 1.5 it would amount to $1500 in weekly revenue from our side, to begin with, the wOETH-ETH pool which alongside ARB should attract liquidity providers to support our growth. This would keep the APR above 5% in the first phase while the pool TVL is less than $1M.

Grant Breakdown:

  • 55,000 ARB for liquidity provisioning on Balancer distributed over 3 months
  • 130,000 ARB distributed over 3 months for onboarding to lending platforms such as Silo to incentivize suppliers to deposit WETH and USDC that wOETH depositors can borrow.
    • This implies that users supply funds on the supply side of the money market which gives wOETH holders liquidity to utilize and borrow

Pools under consideration as we will continue to expand throughout the ecosystem:

  • Balancer wOETH-ETH
  • Camelot wOETH-ETH
  • Uniswap wOETH-ETH
  • Poolside wOETH-ETH
  • Silo wOETH/WETH/USDC
  • Dolomite

Funding Address:

Funding Address Characteristics:

The above address is a 5 of 8 multi-sig wallet with private keys securely stored in cold storage.

Treasury Address:

SECTION 4: GRANT OBJECTIVES, EXECUTION AND MILESTONES

Objectives:

Accelerate the growth of OETH on Arbitrum to facilitate LST usage on the ecosystem as a viable option to hold as you earn a yield on your ETH.

Grant Timeline and Milestones:

  • By the end of week 4: $2M in Balancer pool TVL and $500K TVL in a money market

    • spend 4,624 ARB per week on the Balancer pool + use 130,000 OGV to bribe on Hidden Hand per week to facilitate pool growth
    • Spend 10,792 ARB per week to incentivize pools on lending platforms such as Silo to facilitate money market growth.
    • Total spend = 15,416 ARB per week
  • By the end of Week 8: $6M in Balancer pool TVL and $1.25M TVL in a money market

    • spend 4,624 ARB per week on the Balancer pool + use 130,000 OGV to bribe on Hidden Hand per week to facilitate pool growth
    • spend 10,792 ARB per week to incentivize pools on lending platforms such as Silo to facilitate money market growth.
    • Total spend = 15,416 ARB per week
  • By the end of week 12: $12M in Balancer pool TVL and $4M TVL in a money market

    • Spend 4,624 ARB per week on the Balancer pool + use 130,000 OGV to bribe on Hidden Hand per week to facilitate pool growth
    • Spend 10,792 ARB per week to incentivize pools on lending platforms such as Silo to facilitate money market growth.
    • Total spend = 15,416 ARB per week

Total ARB spent after week 12 = 184,992

How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?

Receiving a grant would enable us to bootstrap LST growth on Arbitrum and provide users an additional efficient way to earn yield while holding a derivative of Ethereum as they can use that token to take additional leverage and unlock capital efficiency within the ecosystem.

It would allow us to create deep liquidity pools to ensure users don’t have to suffer any excessive slippage whenever they want to swap in and out of our token to ensure it benefits users using wOETH on Arbitrum.

Considering the TVL we have amassed on the Ethereum mainnet it indicates that there is demand for a smooth way to earn yield on your ETH, having that incorporated while being able to leverage upon it and grow LST usage on Arbitrum would be a net benefit for the whole ecosystem.

Do you accept the funding of your grant streamed linearly for the duration of your grant proposal, and that the multisig holds the power to halt your stream?

Yes.

SECTION 5: Data and Reporting

Is your team prepared to comply with OBL’s data requirements for the entire life of the program and three months following and then handoff to the Arbitrum DAO? Are there any special requests/considerations that should be considered?

Yes, there are no special considerations.

Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread that reference your OBL dashboard? [Please describe your strategy and capabilities for data/reporting]

Yes, we have the capability to create a Dune Dashboard that tracks our KPIs over time. We would gladly comply with aggregating this data every two weeks and updating the Arbitrum Forum thread.

First Offense: In the event that a project does not provide a bi-weekly update, they will be reminded by an involved party (council, advisor, or program manager). Upon this reminder, the project is given 72 hours to complete the requirement or their funding will be halted.

Second Offense: Discussion with an involved party (advisor, pm, council member) that will lead to understanding if funds should keep flowing or not.

Third Offense: Funding is halted permanently

Does your team agree to provide a final closeout report not later than two weeks from the ending date of your program? This report should include summaries of work completed, final cost structure, whether any funds were returned, and any lessons the grantee feels came out of this grant. Where applicable, be sure to include final estimates of acquisition costs of any users, developers, or assets onboarded to Arbitrum chains. (NOTE: No future grants from this program can be given until a closeout report is provided.)

We agree with the abovementioned conditions.

Does your team acknowledge that failure to comply with any of the above requests can result in the halting of the program’s funding stream?: [Y/N]

Y.

2 Likes

Hello @Pete ,

Thank you for your application! Your advisor will be SeedLatam Gov @SEEDGov

Please join the LTIPP discord and ping your advisor in the general chat so they can create a new channel and start communicating with you.

2 Likes

HI @Pete Arbitrum LTIPP

Hi! Just tagged you in a message in the general channel!

This application is finished, please update the title from draft to final @cliffton.eth @raam

Hey there I’ve amended the title post to reflect that this proposal is FINAL. All the best!

1 Like

The protocol impacts and growth metrics set by Origin Protocol are quite understandable and accurate. For this reason, the yield points of the LST concept’s contribution to ecosystems are clear. We believe that a simple approach for Origin will increase opportunities in the long term both for other protocols and for user traction, and we support their proposals.

1 Like