thank you for the feedback and comments. I am amswering below in the order of your comments/questions:
Overnight is VC funded, we have not issued the OVN token yet as it would limit our VC funding options. We also very much believe that the product should make sense without rewards (which USD+ has demonstrated), then rewards can be used temporarily to promote and scale it. We are graduating from Berkley’s Xcelerator around 2nd of Novemeber and will then take the decision about the OVN-token public sale, which is likely to take place at the end of November.
USD+ is not a USDC wrapper, it is a stablecoin that’s 100% collaterized by yield-generating strategies, made of the best quality stables deposited in high-quality protocols (mostly, not lending pools). USD+ magic power is its ability to generate yield in liquidity pools, e.g. inside Velodrome, thus making liquidity mining way more capital efficient. In a traditional pool you get fees and rewards, in a pool with USD+ you get fees, rewards and yield by USD+. USD+ is a rebase token, so we indeed provide a wrapper over USD+ that some people use for tax purposes, and is used by some protocols for integration purposes (e.g. wrapper is used inside Balancer’s boosted pools) )
We need to work better with DeFIama, as the numbers you mention are obviously wrong. The metrics on Optimism alone largely exceed what you mention and as of this morning are:
(a) TVL - 4.36M for USD+, 4,47M total
(b) Total number of active users - 287 for USD+, 307 total
Overall TVL 8.1M, total active users (hard to exclude duplicates) - roughly 3200, discord community 4,06K. It is a little weird that OP is now our largest chain… what has happened is that once we launched, our power users from Polygon and BNB have moved, in some cases completely, to Optimism - due to much more attractive performance and rates (see below). we have cannibalised at least 3M of our TVL from other chains
As far as trading volumes are concerned, in crypto-pairs USD+ is able to achieve same trading volumes as USDC. For example, wMatic/USD+ on polygon generates same trading volume as wMatic/USDC (as % of TVL). This is due to the ease of arbitrage of USD+ to USDC (in case of price discrepancy, an arbitrageur can take a flash loan in USDC, mint USD+, arbitrage wMatic, pay back flashloan;). On polygon we run our own arbitrage bots and generate b/w 10-15% of the volume. The rest is market volume. we look to achieve the same on OP, once ETH/USD+ and OP/USD+ pairs are established
On OP we have been generating way more than 10%.
The current portfolio is below
The risk in ETS is hedged 2 ways:
(1) Basis risk: the crypto asset is borrowed on AAVE (ETH) or Granary (OP) using USDC as the collateral.
(2) Impermanent loss: we run bots that rebalance the portfolio once there is discrepancy b/w the amount of OP borrowed and OP invested
You can see the current positions on ETS OP/USDC below
Please note that we had to limit the maximum on ETS OP/USDC to 100K because of limited liquidity to borrow OP. The cap filled in within 24 hours. Once OP borrowing is available on AAVE, we will eliminate the cap. ETH/USDC is small as it was only announced/launched yesterday; it is designed to yield 15-20% sustainably, but kind made no sense to promote while USD+ itself was yielding 20% average; Overall, ETS is a well-established product for us on other chains, with clear demand and traction
400K OP request is made of 2 parts:
(a) Liquidity mining program - based on the incentives we look to generate from our side over the next 6 months
(b) Development time required (and honestly, a lot of it already spent) on the deployment and new product development on OP
Current level of bribing is 3.5K USD+ (mostly on Velo); this is a sustainable level of bribes, meaning, these are bribes generated by USD+ organically, based on the current size of operation on OP, and they are sufficient to sustain the business. As we expect the business to grow by at least x5 and the yields on OP to go down to more sustainable levels by at least x2, USD+ will be generating about 8K USD+ of bribes per week; we are asking OP to match the bribes we will provide (8K per week) for the next 25 weeks - a total of 200K USD worth of liquidity mining rewards.
I understand the other part of the grant, dedicated to the development and R&D work, is hard to evaluate and control. we can discuss if it is valuable to be deployed on OP, adjust the ask or move the development elsewhere. On liquidity mining we are asking to match the bribes we will provide, so hope, that part you will find to be fair.