[REVIEW] [GF: Phase 1 Proposal] Overnight.fi V2

📜 Grant Proposals Governance Fund: Phase 1
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Recommendation from DeFi committee C

Details

The proposal describes Overnight’s yield-bearing stablecoin and yield strategies. The re-submitted proposal focuses more clearly on liquidity for the existing products.

Value-Add
The USD+ stablecoin is 100% collateralized with other stablecoins that are invested on-chain in “low-risk strategies” such as LPing on stables, lending & more. The integration of another yield-generating stable in the Optimism ecosystem can have benefits for Optimism users. With additional incentives, Overnight can add liquidity to key pairs on Optimism and improve efficiency - long-term effectivity & sustainability are yet to be seen for this relatively new project.

Traction
Overnight is an early stage project that initially attracted liquidity on Polygon and BSC but moved most liquidity to Optimism. It has gathered a total TVL of more than $8+ Mio since its launch on Optimism in early September.

The yield strategies have decent APYs but they are so far capped at 100K and have only a few users. Yields will likely go down with higher TVL amounts.

Overnight does not have all the contracts public, it has closed open source portfolio rebalancing algorithms behind ETS until at least the public sale of the OVN governance token.

Amount
300K OP : Okay for a relatively new project with value-add where long-term functionality & efficiency is yet to be proven:

  • 175K OP for liquidity mining of USD+ (stables)
  • 125K OP for liquidity mining of ETS+ (USDC-ETH, OP-USDC)

Co-incentives
300K USD+

Alignment
Overnight has moved towards Optimism and is integrating with Op projects.

KPIs
Reasonable KPIs but Optimism should also look at the value-added from the additional TVL

TVL = 15m USD
Users = 2000

Recommendation : YES

Our past recommendation is available on committee recommendation thread

2 Likes
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Thank you for the review and recommendation

1 Like
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Voted yes - I voted yes for this proposal in the previous round and I’m happy to support it again. Thank you to the Overnight team for resubmitting.

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Thank you, Katie, for both votes!

Afterwards, I will try to structure my feedback on the process. As with any process there are many ways to improve, but one thing I must stress: it has been way more transparent and predictable than anything we had experienced across many other chains so far

3 Likes
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Voting YES following committee recommendation. Happy to see the updated proposal and happy to finally vote YES here!

1 Like
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Snapshot vote - passed

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@_Max_plus can you provide a Telegram handle or other contact method so the Optimism team can get in touch about paying out this grant! Feel free to comment on this thread, DM, or email palash@optimism.io