[Mission Request] Optimism Dominance in Yield-Bearing Assets (2 of 4)

Mission Grants 🏹
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Optimism Dominance in Yield-Bearing Assets (2 of 4)

Delegate Mission Request Summary:

This mission is part of a package that is intended to make Optimism the dominant venue for trading and creating yield-bearing assets. The target assets include real-world assets (RWAs), yield-bearing DeFi tokens that are simple in structure, and staked ETH.

This mission is specifically designed to encourage Optimism protocols to diversify their treasuries into yield-bearing assets including, but not limited to, RWAs and staked ETH. This helps build an organic user base for yield-bearing assets on Optimism, and encourages DAOs and companies primarily on Optimism to hold assets that can be relied upon in a down market where their own native tokens are not able to finance growth and expansion.

S5 Intent

Intent 3: Grow application devs on the Superchain

Proposing Delegate

GFX Labs

Proposal Tier

Scales up to tier of proposer

Baseline Grant Amount

500k OP total. Up to 50,000 OP per Optimism-native organization, at an annualized rate of 5% (dollar-denominated) based on the market price of OP on the day of this Mission passage. The Grants Council is authorized, at its discretion, to lower this 50,000 OP cap if market conditions or budget constraints require it.

Should this Mission be fulfilled by one or multiple applicants

Multiple

Submit by

[Date to be set by Grants Council]

Selection by

[Date to be set by Grants Council]

Start Date

[If applicable]

Completion Date

Within 6 months of Mission passage.

Specification

How will this Delegate Mission Request help accomplish the above Intent?

This incentive program is intended to encourage organizational users (e.g. DAOs) on Optimism as of May 1, 2024 to diversify their onchain asset holdings on Optimism. This helps yield-bearing assets (with permissionless token transfers) develop a user base on Optimism, and encourages DAOs and other onchain organizations to be financially secure to support their own future expenditures. This will provide a user base to attract yield-bearing, permissionless assets to Optimism so a trading and investing ecosystem can develop.

What is required to execute this Delegate Mission Request?

  • A whitelist of eligible yield-bearing assets with permissionless token transfer to incentivize. This includes at inception: wstETH, rETH, cbETH, sfrxETH, USDM, USDY, and bI0B1. wstETH and rETH are already important assets on Optimism, cbETH and sfrxETH are assets closely associated with major Superchain members, and USDM, USDY, and bI0B1 are permissionless tokens that were recently vetted and approved for Arbitrum’s treasury diversification.
  • A process for organizations present on Optimism as of May 1, 2024 to apply for the subsidy, which includes easy verification by the Grants Council (or its designated agent) of the amount of the subsidy.

How should the Token House measure progress towards this Mission?

  • Number of DAOs and other Optimism-native organizations taking advantage of this program.
  • Number of yield-bearing assets whitelisted for this program.
  • Amount of yield-bearing assets held by Optimism-native organizations at the close of this program vs at its inception.

Milestones

  • Onchain organizations (e.g. DAO treasuries) hold $10,000,000 in yield-bearing assets. Assets held by their own issuer are not counted towards this metric.

How should badgeholders measure impact upon completion of this Mission?

  • Aggregate capital inflows from the real-world economy, Ethereum, and other chains for yield-bearing tokens on Optimism.
  • Number of RWAs and yield-bearing projects deployed on Optimism that also have permissionless token transfers.
  • Trading activity of permissionless yield-bearing project tokens on Optimism DEXs like Velodrome, Uniswap, and Curve.
  • Amount of rated yield-bearing assets held in Optimism DAO treasuries, to help foster economic resiliency of those organizations.

Have you engaged a Grant-as-a-service provider for this Mission Request?

No.

Has anyone other than the Proposing Delegate contributed to this Mission Request?

No.

This Mission Request is considered failed or withdrawn if the other three missions labeled “Optimism Dominance in Yield-Bearing Assets” do not pass.

Which metric will the success of this Mission Request be evaluated against?

The North star metric against which this Mission Request should be evaluated is TVL, because the initiatives outlined above aim to attract an influx of additional assets. This metric was suggested by the foundation and approved by the Grants Council.

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A North Star Metric has been added at the bottom of this Mission Request in an effort to enable the Collective to make data-driven decisions. By using a single metric for each Mission Request, the Collective is better able to evaluate the performance of all the Season 6 missions in a standardized manner, which will be critical when the Collective makes decisions about Intents, budgets, or other critical components of governance.

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gm gm @GFXlabs – is this Mission Request available for DAO’s with assets that are already deployed and existing with the DAO’s treasury, or only net new allocations of yield bearing assets to their treasury?

How can a team apply to get new yield-bearing assets to be added to the list?

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This

It’s at Grants Council discretion (so an internal GC vote). Explaining here in public what the asset is would be an excellent start. More information is better - technical, economic, where the yield is being bridged in from (e.g. real world, Ethereum, or another chain). Less familiar assets probably need more information to get the Grants Council informed enough to consider a vote.

Apologies that we don’t have a template. For inspiration, you could peruse the old MakerDAO collateral onboarding applications.

Note that there is not a guarantee the Grants Council will consider an asset, or that one considered will be approved.

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@GFXlabs – LRTs on Ethereum such as rsETH, ezETH, and weETH would be interesting to explore, for this Mission Request as well as Mission Request, Optimism Dominance in Yield-Bearing Assets (3 of 4).

In addition, USDGLOW (glodollar.org) would be an interesting yield bearing asset for DAOs who wish to fund public goods with idle assets in their treasury. Here is more information on how GloDollar is issued.

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They are welcome to present a petition for inclusion here on this thread, but this other Mission Request focused on LRTs might actually be a quicker (or additional) route for those assets to see support.

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Anthias Labs is proposing to remove the May 1, 2024 deployment date requirement for eligibility for this Mission Request. After the first few cycles of Season 6, we have seen multiple worthy and valuable candidates that are ineligible for this MR because they launched on Optimism after May 1, 2024.

This May 1, 2024 clause was originally added to this MR in order to block protocols from deploying to Optimism solely to receive the incentives. However, we now see this behavior as highly unlikely, and, additionally, there are alternative ways to block this behavior, including scoring the long-term viability and Optimism-alignment of the project as a whole.

The specific changes we propose for this MR:
Original-1:
This incentive program is intended to encourage organizational users (e.g. DAOs) on Optimism as of May 1, 2024 to diversify their onchain asset holdings on Optimism.
Updated-1:
This incentive program is intended to encourage organizational users (e.g. DAOs) on Optimism to diversify their onchain asset holdings on Optimism.

Original-2:
A process for organizations present on Optimism as of May 1, 2024 to apply for the subsidy, which includes easy verification by the Grants Council (or its designated agent) of the amount of the subsidy.
Updated-2:
A process for organizations present on Optimism to apply for the subsidy, which includes easy verification by the Grants Council (or its designated agent) of the amount of the subsidy.

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@GFXlabs - when must these asset issuer teams petition by to be eligible for the upcoming round of grants?

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Grants this season are in general open for submissions on a rolling basis until early November.

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thank you @0xLettuce for the suggestion of using USDGLO, I’ll write up something for Glo Dollar and share it on this thread shortly

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Petition to add weETH

Ether.Fi is presenting a petition to add weETH as part of this Optimism mission. eETH is the largest liquid restaking token (LRT), with nearly 2M ETH restaked. eETH is highly liquid and redeemable for underlying ETH, allowing it to historically hold its peg within 2% and recovering quickly even in turbulent market conditions.

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weETH has expanded to L2s using LayerZero’s OFT standard. Currently on Arbitrum, weETH has achieved a market cap of $305 million. Our goal is to replicate this success on Optimism Mainnet, incentivizing users to move liquidity to Optimism in search of opportunities with yield-bearing assets, thereby contributing to the growth of Optimism’s TVL. On Optimism Mainnet, weETH currently has only 89 holders and $300k in TVL. Through this mission, weETH would introduce the largest, safest restaking option to Optimism Mainnet, potentially growing its TVL to $50M+.

Additionally, EtherFi offers a product called Liquid, which provides automated strategies to help clients achieve the best risk-adjusted returns. The “ETH Yield” and “Market Neutral USD” Vaults together have over $460M in TVL. These vaults aim to allocate capital throughout various pools on DeFi protocols on Ethereum L1 and L2s. By expanding weETH on Optimism Mainnet, Liquid could help seed liquidity in key pools, attracting more capital inflows into the ecosystem. This would position Liquid as a strategic liquidity provider within the ecosystem and help grow Optimism’s TVL beyond just weETH.

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@GFXlabs question here: would it be beneficial to open this up to any treasury that could migrate over to OP? That alone could be a bit of a catalyst for movement to Optimism, especially for those crosschain-oriented protocols that could benefit from OP Mainnet as a neutral layer.

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That seems fine, as long as there’s either a delay in payments or some form of clawback to prevent overt gaming.

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Proposal to add Glo Dollar (USDGLO)

The Glo Foundation proposes to add Glo Dollar to the whitelist of eligible assets.

Glo Dollar is a US-regulated stablecoin that donates 100% of its profits to public goods. On Optimism, Glo Dollar market cap by default generates funding for Retro Funding.

Integrating Glo Dollar (USDGLO) into Optimism’s asset list will drive substantial public goods funding and enhance treasury stability, contributing significant amounts annually to Optimism’s Retro Funding program. This aligns directly with Optimism’s mission and provides a scalable funding model for the ecosystem longterm. At $10 million in TVL, Glo Dollar could generate up to $400,000 annually for public goods. If Glo Dollar grows to a $120 million market cap (10% of Optimism’s current stablecoin TVL), it would contribute up to $5.2 million each year to Optimism’s Retro Funding. In addition, we believe that this synergistic collaboration is such a strong narrative that more TVL will flock to Optimism to contribute to Optimism’s Retro Funding and Glo Dollar growth. This could further grow Glo Dollar’s contribution to Retro Funding 10-100x.

Who is the interested party for this application?

Glo Dollar, (USDGLO) is an 1:1 fiat backed, US regulated stablecoin. We donate 100% of our profit into public goods, including Optimism’s Retro Funding.

Provide a brief high-level overview of the project.

Glo Dollar (USDGLO) is a fully-backed stablecoin, similar to USDC, designed to fund public goods. What sets Glo Dollar apart is that 100% of the profits from its reserves are donated to public goods and charitable causes, instead of being distributed to private shareholders.

Stablecoins typically generate around $10 billion annually from their reserves, and Glo Dollar reinvests all of this into public goods. For example, if Glo Dollar were to capture just 10% of the stablecoin total value locked (TVL) on Optimism, it would contribute over $5.2 million annually to public goods. As the Optimism network grows, so does Glo’s impact, potentially funding millions more as its market share increases.

By using Glo Dollar, users help fund initiatives like Optimism’s Retro Funding, without any extra cost. Glo Dollar is already live on 7 chains, including Ethereum, Celo, Optimism, Base, Arbitrum, Polygon, and Stellar.

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Provide a brief history of the project.

In April 2024, Glo Dollar launched as the stablecoin that funds public goods. We launched our app where Glo Dollar holders to decide which charitable causes and public goods they’d like to support. This includes Optimism’s Retro Funding, Gitcoin, Protocol Guild, and Giveth. More information here: Glo Dollar 2.0: the stablecoin that funds public goods

Proven Partnerships and Broad Adoption

Glo Dollar is integrated across major networks, including Ethereum, Optimism, Base, Celo, Arbitrum, Polygon, and more. Several organizations, including Polygon Labs, Mento Labs, ShutterDAO, and Gitcoin, have already swapped 6-7 figure amounts into Glo Dollar, demonstrating trust in its model and mission. Giveth, CCN, CCN x Octant and Regen-Coordination have also run large scale grants programs, up to 250k using Glo Dollar as the payout token.

Efficient Liquidity and Swap Capabilities

Glo Dollar also offers direct 1:1 minting and redemption swaps through trusted partners like Brale and OTC desks. These services ensure that large trades are executed with guaranteed liquidity and zerominimal slippage, providing reliable exchange rates for institutional users andor DAOs. This helps maintain Glo Dollar’s stability and ensures predictable pricing for participants across various ecosystems.

Cross-Chain Swap Capabilities:

Glo Dollar supports easy cross-chain swaps through platforms like Jumper.exchange and Squid Router. These integrations allow users to move Glo Dollar throughout the Superchain, enhancing liquidity and flexibility across multiple chains.

Bear Market Stability

Glo Dollar protects treasuries during bear markets by offering a stable value while continuing to fund public goods within the ecosystem at zero cost to holders. This reduces reliance on volatile assets and ensures consistent support for contributors.

Link the whitepaper, documentation portals, and source code for the system(s) that interact with the proposed collateral, and all relevant Ethereum addresses. If the system is complex, schematic(s) are especially appreciated.

Link any available audits of the project.

Smart Contract Audits

Monthly Reserve Reports

Link to any active communities relating to your project.

Optimism Retro Funding is a newly added recipient of funds.

Mento (Celo) swapping $1M into Glo Dollar

ShutterDAO swapping 300k into Glo Dollar

Polygon Labs swapping 150k into Glo Dollar

Gitcoin swapping 100k into Glo Dollar

Gitcoin Community rounds using Glo Dollar as their payout token

Giveth rounds using Glo Dollar as their matching fund stablecoin token

How is the applying collateral type currently used?

Similar to USDC, we use Cash and US Treasury Bills

Our monthly Reserve Reports

Does one organization bear legal responsibility for the collateral? What jurisdiction does that organization reside in?

We collaborate with Brale to issue Glo Dollar. Brale, a US regulated financial institution (NMLS ID #2376957) is responsible for Glo Dollar’s financial and compliance requirements, and operate the centralized minting and redemption portal that all Glo Dollars in circulation stem from., Similar to USDC, the assets backing Glo Dollar are conservatively managed in cash, cash equivalents, and short-term US government-backed debt. These assets are held in US-based financial institutions and undergo monthly attestations by a third-party accounting firm, verifying that reserves equal or exceed the amount of Glo Dollar in circulation for full transparency and compliance.

Where does exchange for the asset occur?

Multiple options depending on preference of OP:

  1. Our centralized minting and redemption portal powered by Brale (infinite liquidity)
  2. OTC through Bitgo, blockchain.com, or 1Konto (infinite liquidity)
  3. DEX trade through Jumper.exchange / Uniswap

Conclusion

By including Glo Dollar (USDGLO) in Optimism’s treasury diversification asset list, the ecosystem can ensure treasury stability while driving substantial public goods funding at no cost. Integrating Glo Dollar amplifies the financial impact on Optimism’s Retro Funding and long-term ecosystem growth.

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Thank you @0xLettuce for mentioning Glo Dollar earlier in the thread, and getting this on our radar.