We just went through the proposal, website, docs, analytics as we didn’t know of Overnight before.
Based on the proposal, we assumed your OVN token is already live but we couldn’t find it on Coingecko and your docs show some preOVN token and future IDO with tokenomics under development and missing links (for example to ovnstable.io).
According to DeFiLLama & Coingecko the USD+ token has 2.5M marketcap (TVL).
According to website & proposal, Overnight offers a USDC wrapper (USD+) & exchange-traded strategies (ETS) that achieve supreme yield from
- Stablecoin deposits into lending protocols
- Stable-to-stable liquidity pools
- Protocol-owned liquidity
First thoughts:
- Appreciate your proposal, deployment to Optimism, first pools on Velo, and consideration of Optimism as your innovation hub.
- Communication focuses on “high yield”, “passive investment”, “low risk investment” as well as big roadmap & ideas. So far, there is little traction (6 &15 users in ETS strategies) though and the product, Op deployment & community look very early stage.
- The Vanguard approach of simple investing has some merit. Other DeFi projects such as Yaxis also went for this at some point but mainly focused on creating a meta-aggregator of yield strategies. PoL for stablecoin pairs can be a solid yield source (See Alpha Homora). Probability of loss seems small but total value at risk could be all AUM in a pool with one asset moving away from 1 aka going to 0.
- In our opinion, the USDC wrapper offers little additional value to spur Optimism growth and incentivizing its use at this stage might be a risk to Op users. The ETS product looks interesting but the daily payment if profitable seems strange - would like to see some more traction.
- Having another stablecoin and potentially more innovative products on Optimism is worth a shot.
Possible improvement:
- Ask is very high for size & stage of the project. You can compare it to a recent proposal for 31K OP tokens from Interest Protocol which was approved to speed up deployment on Optimism. A second Interest Protocol proposal over 240K OP for post-deployment is also on the forum but it seems too early to fund at this point in time. We believe an approach with a similar Ask amount to Interest Protocol Proposal 1 might be more suitable at this stage. Potentially also funding from another source in Optimism (or externally) makes more sense to advance development?
- Token distribution plan should be more detailed & focus on ready products. You can submit a second proposal later-on.
We’d appreciate some insights to learn more about the project & proposal:
- Can you explain point 3 in relevant usage metrics? USD+ trading volume? Who is trading it? Why (is it between BUSD & USDC)?
- What is the current strategy for USD+ to achieve 10% APR. (See overnight.fi)
- How is risk hedged in ETS Ruby (weth-usdc pool, 14% APY, 2k TVL) or ETH Garnet (USDC-OP, 29% APY, 100K TVL) strategy?
- How did you come up with the 400,000 OP request?
- Can you share more about the co-incentives?