Unlike traditional liquid staking tokens, Origin Ether enhances staking rewards with additional streams of yield. OETH earns ancillary rewards from using ssv.network's distributed validator technology (DVT), which boosts staking yields via SSV token incentives.
Rewards from liquid staking tokens are then passed onto OToken holders, being boosted by Origin DeFi’s rebasing mechanism. Moreover, some of Origin Ether’s collateral is held in WETH and is utilized by Origin Ether’s most lucrative strategy: The Convex AMO.
Thanks to Origin’s nuanced approach to liquid staking, OETH holders have earned over considerably higher APYs when compared to traditional liquid staking tokens. Let’s take a look at Origin Ether’s AMO, and how it helps bolster capital efficiency while strengthening the OETH-ETH peg.
Origin Ether’s Algorithmic Market Operations (AMO) strategy deploys WETH collateral assets into Curve Finance's OETH-ETH Metapool. Subsequently, Metapool liquidity provider tokens (OETHCRV-f) are staked in Convex Finance to maximize Curve (CRV) and Convex (CVX) rewards. The strategy differentiates itself by pre-minting OETH and injecting it into the Metapool alongside WETH, thereby amplifying returns.
Hold on, how is pre-minting OETH without collateral assets safe? This is a common question when astute DeFi investors first look at the AMO strategy. Let’s look at how it's not only safe, but actually helps maintain the OETH-ETH peg.
Questions surrounding the security of pre-minted, non-collateralized OETH are warranted. However, it's critical to understand that OETH owned by the AMO strategy within the Curve Metapool is not in public circulation and, hence, does not require backing.
When these strategy-owned OETH tokens exit the Metapool via ETH swaps, they’re immediately backed by an equivalent amount of ETH swapped into the pool, thus becoming fully collateralized. If the strategy removes liquidity from the OETH-ETH pool, the uncollateralized OETH is automatically burned.
To better visualize how funds are deployed, here’s the detailed value transfers of depositing WETH to the AMO strategy:
Another benefit of the OETH AMO is that it enhances the stability of the OETH-ETH peg. By rebalancing the Metapool when the AMO deploys funds, the OETH-ETH peg is strengthened. Additionally, the strategy offers a reduced fee of 0.04% for swapping OETH for ETH via the Metapool, compared to the 0.5% incurred when using the vault.
Following Origin Ether’s recent AMO improvements, single-sided deposits and withdrawals to the OETH-ETH pool are now supported under certain conditions. This allows for new ways to maintain the OETH peg:
However, these functions are only permitted when the end result moves the liquidity pool towards the OETH-ETH peg, or maintains the pool balance. In doing so, OETH achieves a tighter peg to ETH while becoming more efficient in the process.
The AMO strategy is designed to effectively double returns by pre-minting OETH in accordance with the ETH added to the Metapool. The amount of OETH pre-minted ranges between one to two times the quantity of ETH deposited, depending on the existing balance of the Metapool. If there is less OETH than ETH in the pool, then more OETH is added with the WETH to help rebalance. Conversely, if there is more OETH than ETH in the pool, no new OETH will be deposited by the AMO.
Thanks to the recent AMO improvements, the OETH protocol has more control over how liquidity is managed within the AMO strategy. Not only can OETH be pre-minted as stated above, but single-sided liquidity deposits are now enabled under strict conditions.
This proactive rebalancing results in a more lucrative yield generation mechanism. Thanks to the AMO, Origin Ether can provide roughly 2x the liquidity on Curve, which results in OETH holders earning a much higher share of the rewards pool.
Consider a scenario where the AMO strategy owns 75% of the Metapool's LP tokens, and thus has a claim to 75% of the ETH and OETH in the pool. A user swaps 10 ETH for OETH in the pool. As a result, the collateral assets the AMO can claim from the metapool increase by approximately 7.5 ETH (after a negligible 0.04% fee). This results in a harmonious increase in both circulating OETH and ETH collateral, preserving asset integrity.
As shown in the chart below, the AMO strategy has claim to 75% of the ETH and OETH in the pool (this is indicated in blue). In this example, the pool is imbalanced with more OETH in the pool than ETH.
The ETH (left) in blue is collateral for OETH that is in circulation. However, the OETH (right) in blue, is not in the circulating OETH supply and does not have any backing collateral. Therefore, if the AMO removes liquidity from the pool, this OETH will be automatically burned.
The portion of OETH depicted in orange that is claimable by anyone who is not the AMO strategy is in the circulating supply of OETH and is backed by ETH. These tokens work the same as any other ERC-20 being used for liquidity provision.
Origin Ether's innovative AMO strategy offers a highly attractive yield optimization mechanism while maintaining rigorous security standards. The built-in financial efficiency and enhanced peg stability make it a compelling option for serious DeFi investors looking for optimal risk-adjusted returns.
To learn more about where Origin Ether’s yield comes from, we invite you to check out Origin’s Proof of Yield dashboard for an in-depth view of the yield generated by OETH.
Origin Ether is proudly built on an unwavering commitment to transparency. The recent Proof-of-Yield update enabled users to monitor all aspects of yield generation, in addition to comprehensive metrics on strategies and fund flows.
The team has now added two more features to OETH’s rich analytics portal, giving users even more visibility into the protocol’s dynamics. Users can now view robust metrics on circulating supply as well as yield distribution, leaving no room for uncertainty.
Without further ado, let’s dive into what’s new on Origin Ether’s analytics page.
The OETH Dripper is a novel mechanic responsible for distributing rewards tokens as yield to OToken holders. The Dripper harvests rewards tokens and distributes them to holders over a 7 day period.
This approach ensures that yield is as stable as possible, while also preventing attackers from diluting holders’ returns during large yield spikes. The Dripper mitigates opportunities for flash loan exploits, protecting holders in the midst of high volatility and liquidity events.
With the latest Analytics upgrade, users can monitor yield held by the Dripper, as well as its rate of distribution.
OETH’s new supply metrics provide far greater clarity on tokens in circulation.
The Curve AMO forms a core component of Origin Ether’s yield generation. This strategy mints and burns OETH under very strict conditions to keep the OETH-ETH pool balanced and earn yield in the process. OETH held by the AMO is considered Protocol Owned Supply and never truly enters circulation.
In practice, this means that TVL increases when users mint OETH natively. Conversely, swaps on the OETH-ETH Curve pool do not affect TVL but increase circulating supply.
With the latest analytics upgrade, users can now easily distinguish between circulating supply and Protocol Owned Supply to better gauge OETH’s adoption and liquidity.
In addition to circulating supply and funds held by the AMO, OETH’s analytics page also provides insights into OETH’s price relative to ETH. While this is inarguably the most boring chart on Origin Ether’s analytics page, it highlights Origin Ether’s tight peg to ETH.
As highlighted by the chart, OETH almost always trades within 20 basis points of ETH. Because users can redeem OETH for its underlying collateral at any time, Origin Ether has closely followed ether’s price since launch.
Origin DeFi is committed to creating innovative solutions that address CeFi’s many failings. OETH’s impressive adoption evidences the rising demand for on-chain yield products that allow users to take full control of their investments.
The latest analytics upgrade is one of many mechanics being tirelessly refined to provide users with the most seamless yield generation offerings in the space.
Stack ETH faster with OETH: app.oeth.com
Explore OETH’s groundbreaking mechanics: oeth.com/analytics
Yield tokenization pioneer Pendle Finance has added support for Origin Ether, carving out fresh opportunities for users to harness OETH and its outsized returns.
Pendle’s novel AMM allows users to trade yield, supply liquidity, and earn fixed APYs on assets.
This integration empowers traders to further boost yield on offer through an array of innovative mechanics.
All assets on Pendle carry maturity dates. This is the date at which PT can be redeemed for the full underlying token. The YT accrues yield until the maturity date, after which it has no value.
Users can also supply liquidity to Pendle’s OETH pool in order to accrue rewards.
Pendle’s liquidity pools pair wrapped assets with their principal counterparts (in this case, SY-OETH and PT-OETH).
Given that the principal token reaches parity with the underlying upon maturation, suppliers can enjoy increased rewards with minimal risk of impermanent loss.
The platform’s native token, PENDLE, can be staked to further boost rewards. Locking up PENDLE also grants users governance rights in the form of vePENDLE.
OETH’s presence continues to expand in seismic waves, as the protocol’s bleeding-edge mechanics deliver outsized, scalable yields that dominate the LST arena.
Pendle’s integration provides the OETH community with even more yield opportunities at the forefront of DeFi innovation.
With further integrations and fresh features constantly in the pipeline, users can look forward to an enhanced experience and more ways to stack ETH faster with OETH.
Get going now: app.oeth.com
Every month, the Origin team publishes an update to our token holders and the broader community. We hope you enjoy our August 2023 edition.
NFTs get real with Origin Story’s Redeemable NFT Platform, and the OGV DAO increases OUSD yield with new strategies. Check it out!
August marks another productive month for both Origin Story and Origin DeFi. From bringing new yield strategies to OUSD to launching Origin Story’s Redeemable NFT platform, Origin’s products and tokenomics have seen meaningful improvements. Here's a sneak peek at what this month's update will cover:
Sit tight, as we delve into Origin DeFi’s and Origin Story’s accomplishments in August.
The OGV DAO upgrades OUSD: The MakerDAO DSR and Flux Finance are now part of Origin Dollar.
August saw major upgrades to OUSD after OGV stakers approved the Flux Finance Liquidity Provision Strategy and the MakerDAO DSR. Largely thanks to the MakerDAO DSR, the trailing 30-day APY on Origin Dollar has increased by 150+ basis points since August 1st.
Flux, a novel lending protocol developed by the Ondo Finance team, differentiates itself through collateralization by the Ondo Short-Term Government Bond Fund (OUSG). This offers OUSG holders a liquid connection to an ETF of short-term US Treasuries. OUSD's integration with Flux allows it to earn compelling APYs from lending stablecoins into Flux liquidity pools.
Due to its structural similarity to Compound V2, the integration process was streamlined, though rigorous reviews were conducted to ensure robust security standards.
Further enhancing OUSD's suite of strategies, an OGV governance proposal passed to integrate MakerDAO’s DAI Savings Rate (DSR) with Origin Dollar. Launched in 2018, the DSR supports DAI's stability by enabling users to earn interest on deposits, currently providing a robust 5% APY.
The implementation of the DSR strategy allows OUSD holders to reap the high yield without additional risk. This addition complements OUSD's existing portfolio, emphasizing the project's commitment to offering the best risk-adjusted stablecoin yields in DeFi.
The integration of both Flux Finance and MakerDAO's DSR reflects Origin DeFi's consistent dedication to security, risk management, and seamless usability. Both strategies were carefully assessed and chosen for their potential to add value for OUSD holders without compromising on the platform’s security. OUSD holders continue to enjoy best-in-class security and user-friendly experiences, now with more yield-earning mechanisms contributing towards OUSD APYs.
Origin Ether continues to leverage its Convex AMO as its primary strategy. With strong liquidity on Curve, swappers can now swap 7-figures of liquidity with minimal slippage. Rocket Pool ETH (rETH) is Origin Ether’s second most heavily allocated strategy, with nearly 10% of OETH collateral being deployed to rETH.
Origin Ether’s next yield strategy is under audit by OpenZeppelin, and the core team aims to present the upgrade to OGV governance in the coming weeks. This upgrade lays the groundwork to expand Origin DeFi’s AMO, helping OETH become even more capital efficient on various AMMs.
Origin DeFi continues to broaden its accessibility and increase its tokens’ utility through various ecosystem integrations. The new yearn.finance OETH vault offers a streamlined method to compound OETH-ETH LP rewards and boost yield opportunities.
Further strengthening Origin's analytic capabilities, integrations with LunarCrush and Dexscreener enable users to access critical metrics on OGV, OUSD, and OETH. Additionally, Origin’s integration with Oku, a cutting-edge trading platform built atop Uniswap v3, unlocks advanced trading functionalities such as limit orders on OETH, OUSD, and OGV.
These integrations offer new ways to buy, hold, and manage Origin DeFi’s tokens, making them more accessible than ever before. To view the full list of ecosystem integrations, check out the OUSD and OETH ecosystem pages.
NFTs just got real with Origin Story’s Redeemable NFT platform. Stay tuned for phygital drops from new and existing partners!
Origin Story unveiled a huge evolution in its offerings this August with an all-new Redeemable NFT platform. Designed to bridge the gap between tangible assets and the digital realm, the platform is a testament to the endless possibilities and myriad of benefits that NFTs offer. It amplifies transparency in ownership and provenance, providing a high level of assurance in markets where the authenticity of assets is critical.
With the launch of this new development, brands have a unique opportunity to recognize and honor their most loyal followers. This isn't just about rewarding dedication; it's about reimagining what brands can offer. Envision a world where physical and digital treasures find their way seamlessly to your doorstep or become tradable commodities on bespoke marketplaces offered by Origin Story.
Further marking Story’s accomplishments this month, we're excited to announce the launch of a dedicated NFT marketplace for the rising web3 rapper, Spottie Wifi. Built with the precision and expertise that Origin Story is known for, this platform offers fans and collectors a curated space to engage with Spottie Wifi's unique creations.
Origin Story’s entry into redeemable NFTs isn't just about innovation; it's a continuation of our legacy, known for making history in the NFT landscape. From the groundbreaking 3LAU music NFT drop to the trailblazing real estate NFT transactions with RoofStock onChain, Origin Story’s journey has been about pushing boundaries. The dive into the redeemable sector is yet another step in this direction.
With a firm belief in the potential of tokenizing Real World Assets (RWAs), we envision them reshaping verticals from luxury goods to real estate.
For those visionaries eager to explore the possibilities of redeemable NFTs, get in touch with us here.
Check out the latest yield opportunities, staking updates, and tokenomics data for Origin’s tokens.
The launch of the redeemables platform elevates the OGN ecosystem. Each collaboration brings volume, and OGN stakers will earn from sales that occur on the secondary marketplaces following a redeemables drop. This increased activity will translate to tangible ETH rewards for our community, claimed at the end of each season.
To bolster adoption on Origin Story’s redeemables platform, there’s a temporary 0% marketplace fee on redeemables marketplaces. To compensate for the loss of revenue in the short-term, the Origin Foundation will subsidize the Season 4 pool with boosted OGN rewards.
Season 4 of OGN staking is actively underway and will end on November 3rd, 2023. OGN holders are reminded that the lock-up phase commences on October 4th, 2023. Thus, to maximize benefits, it's crucial to ensure OGN is staked before this date. Doing so will allow stakers to continue accumulating points through the season's conclusion. Underscoring a deep-rooted belief in the protocol’s future trajectory, approximately 69.4 million OGN has already been staked at the time of writing.
For a comprehensive overview of OGN tokenomics in real time, please refer to the OGN dashboard.
Origin DeFi Governance (OGV) continues to show strong fundamentals, accruing value to stakers via fees from OETH and OUSD. In the month of August, the OGV DAO earned around $2,000 per day from these fees.
As shown by the Token Terminal daily revenue chart, the OGV DAO earned less than $500 per day from Origin Dollar earlier this year. After OETH launched on May 16th, DAO revenue increased nearly 4-fold in a matter of months. As Origin’s OTokens continue to capture TVL, OGV Stakers reap the benefits of this growth through the OUSD and OETH performance fee.
As a testament to the community’s belief in Origin DeFi, over 80% of all OGV has been staked for veOGV. veOGV holders currently earn up to 54.5% APY on their tokens, earning yield from OToken fees and OGV incentives.
Origin Protocol expanded its team in August with a frontend engineer and Korean community manager.
Last month, Origin DeFi hired a new frontend developer, Antoine Codogno. Antoine has years of experience building in web3, previously working at mStable with Origin DeFi’s Head of Engineering Rafael Ugolini. Previously, Antoine worked at Frax, a leading liquid staking and stablecoin protocol on Ethereum. Origin DeFi is thrilled to have another veteran web3 builder join the team as we expand yield-bearing tokens throughout Ethereum’s ecosystem.
Also in August, Origin Protocol hired a Korean community manager, Minsu Ji. Before joining Origin, Minsu grew his own crypto community in Korea, with over 20,000 members joining his group for insights into the blockchain ecosystem. As Origin Protocol expands globally, we’re confident Minsu will revitalize Origin’s presence in Korea and the broader Asia community.
Origin’s blogs were revamped in August, starting with the Origin Protocol and Origin Story websites. Internationalization is now supported on these pages, allowing Origin’s global community to receive product updates as they are announced. Currently, Origin’s product announcements are being published in English, Spanish, Vietnamese, Turkish, Russian, and Korean.
Thanks for reading up on all things Origin Protocol! Origin has been hard at work making its platforms more accessible than ever, enabling new use cases for NFTs and novel yield mechanisms in DeFi. Last month, we made new announcements you may have missed. If you did, we got your back! Check out the most important announcements from August below:
Want to get more involved with Origin Protocol? Join Origin’s Zealy board and Carma Community to earn OGN rewards, among other prizes. We hope to see you back here at the same time next month for September’s Token Holder Update!
As DeFi veterans, Origin understands that proactive security and user protection is of paramount importance. Both OUSD and OETH boast cutting-edge mechanics that serve to protect users and their funds from external black swan events that tend to spread rapidly in the on-chain arena.
Origin DeFi’s Dripper further bolsters these platforms by stabilizing yield distribution and minimizing the impact of irregular yield spikes.
The OUSD and OETH Drippers harvest rewards tokens generated by each protocol's strategies. Each Dripper then disburses this yield to OToken holders over a 7-day period.
The impact of this approach is two-fold. Users can enjoy more stable APYs without needing to stress over large spikes caused by broader volatility. At the same time, this feature helps prevent attackers from exploiting OUSD or OETH. By dispersing yield over 7 days, the Dripper reduces the likelihood of profitable flash loan attacks on Origin DeFi’s tokens.
Like the rest of Origin DeFi’s mechanics, the Dripper’s activity is fully transparent. Users can view exactly how yield is harvested and the rate of distribution via the OETH analytic portal.
USDC’s de-peg earlier this year offers a searing example of the Dripper’s importance. On March 10th, USDC issuer Circle confirmed that $3.3B of its reserves were at risk following the collapse of Silicon Valley Bank.
As a result, USDC fell nearly 20% to $0.82, wreaking havoc across DeFi. The seismic event saw OUSD’s APY briefly spike to more than 170%.
With increased volatility on AMMs, the Dripper was able to spread out yield over a 7-day period. A large factor that impacted OUSD APYs during the USDC depeg was the OUSD vault’s redeem fee, which further protects long-term holders from yield dilution. As long-term holders continue holding their OTokens, they earn ancillary yield from the vaults’ redemption fees. These fees incentivize investors to hold their tokens in times of volatility, benefiting those who are long-term oriented.
Thanks to the Dripper’s meticulous integration, yield was still disbursed smoothly despite DeFi’s heightened volatility at the time. Further, redemption fees caused a large spike in APYs, incentivizing investors to continue holding their positions.
Users of both OETH and OUSD can rest assured that their yield is protected against future liquidity events, which are still commonplace due to the industry’s nascency.
The Dripper is one of many mechanics that evidence Origin’s unerring commitment to protocol security and stability.
Origin DeFi’s cutting-edge yield generation platforms have been rigorously audited by some of the space’s leading firms, including OpenZeppelin, Certora, and Trailofbits. Further, OUSD and OETH boast open-source codebases that allow anyone to monitor and flag issues.
By building with a user-centric ethos steeped in transparency and innovation, Origin DeFi continues to push the boundaries of on-chain yield generation while maintaining robust security and usability.
Explore OETH’s newly improved analytics dashboard to discover how Origin Ether achieves its outsized APYs.
We’re excited to announce that another web3 veteran is joining the Origin team! Please join us in welcoming Antoine Codogno to Origin Protocol.
Antoine will be adding to Origin’s best-in-class user experience in his capacity as Frontend Engineer for Origin DeFi.
Based in Brussels, Antoine brings with him a wealth of cross-industry expertise in crafting dynamic and engaging platforms.
Antoine’s Web3 journey kicked off at stablecoin protocol mStable, where he developed and maintained the platform’s dApps. During his time with mStable, Antoine helped to build the protocol’s yield-bearing Metavaults, equipping him with hands-on expertise in coding yield generating stablecoin products.
This expertise saw Antoine later join the stablecoin innovators at Frax, providing him with vital experience at the forefront of DeFi. Given Frax’s structural similarities to Origin’s OTokens, we’re incredibly excited for Antoine to bring his insights to our team.
Antoine discusses his decision to join Origin with visible excitement:
“I joined Origin to gather with talented former colleagues and help develop the future of DeFi frontends. Super excited to join a very professional and organized team!”
A proud father, Antoine spends his downtime exploring the world with his daughter, Alice. You can also find him swimming or riding his motorbike on the rare occasions that he isn’t building outstanding products.
Please welcome Antoine Codogno to the Origin team!
Origin DeFi’s OUSD and OETH have consistently returned market-beating yields. Beyond optimizing collateral between blue-chip DeFi protocols, OTokens enable users to earn above market rates on Aave, Curve, Compound, and liquid staking tokens.
Simply put, the reason for this is that not all OTokens in circulation receive yield. Non-yield bearing OTokens earn yield for yield-generating OTokens, essentially concentrating yield for normal holders.
Let’s dive into a key element of how OETH and OUSD generate elevated, sustainable yield for its users: Origin’s rebasing mechanism.
In 2020, Ethereum’s stack of DeFi applications proliferated, as on-chain lending and trading became popular. Users could earn yield on their stablecoins via lending and decentralized exchange applications, with APYs that beat traditional banking yields by a significant margin. Thus came an influx of USD into Ethereum stablecoins and DeFi applications.
However, the demand to use Ethereum also meant an increase in transaction fees. As such, many small users were priced out earning these yields efficiently. With the variable nature of DeFi yields, only larger players who could afford to actively rebalance their portfolio earned the best yields.
The ethos of Web3 is to create an open financial system that anyone could use and access. If only whales could take advantage of the ecosystem, its mission would have failed. With the vision of creating a tool that makes market-beating stablecoin yields accessible to retail users, OUSD was created.
The two most prohibitive factors for retail users to earn optimized stablecoin yields are transaction fees and the due diligence required for yield strategies. Actions like swapping, staking, unstaking, and rebalancing all require ETH gas fees, and could cost users hundreds of dollars per year based on activity.
To mitigate transaction fees, Origin added a rebasing mechanism that credits OUSD holders with their yield, replacing the need for staking and unstaking. Users simply have to mint or swap stablecoins for OUSD via DEXs, or purchase it on centralized exchanges like Kucoin or Gate.
Stablecoins received by OUSD are then deployed into DeFi yield strategies, which are battle-tested and audited internally and externally. By pooling everyone’s deposits together, OUSD achieves the economy of scale to optimize active rebalancing. Holders could be assured that they were receiving the best risk-adjusted yields at any given time.
Since OUSD rebasing is used to credit holders with passive yield, OUSD being used for other purposes is not credited with rebasing yield - OUSD held in smart contracts does not receive rebasing yield by default. This means that OUSD sitting in decentralized exchanges to earn trading fees and rewards do not earn rebasing yield; this yield is distributed to regular holders instead.
With the amount of OUSD sitting in smart contracts, OUSD’s yield multiplier for regular holders currently sits at 1.66x! This means that for every 1 OUSD a user holds, there is more than $1 of stablecoins working for them in DeFi.
The recent boom in demand for ETH liquid staking tokens has also given rise to demand for an ETH yield aggregator that leverages liquid staking. Preparing for Ethereum’s Shanghai upgrade, OETH was created to give users the same passive income tool as OUSD, but for ETH. By building integrations with DeFi strategies and multiple liquid staking providers, OETH offers the best risk-adjusted yields in DeFi.
To recreate the OUSD multiplier effect for OETH holders, Origin had to create opportunities for active farmers to use OETH in smart contracts. With the option to provide liquidity on Curve or through yield boosters like Yearn, approximately 10% of OETH’s circulating supply sits in smart contracts, providing a 1.1x boost to regular holders.
By keeping both passive holders and active yield farmers in mind, Origin has created a system where holders benefit from the optimizations yield farmers employ. Holders get to stack USD and ETH passively, with elevated yields, no staking required, automatic compounding and rebalancing, and constant updates in yield strategies with external audits. Users simply have to hold their OTokens in their wallet.
Ready to generate passive USD rewards? Check out OUSD. Want to start stacking ETH faster? Get OETH today.
A governance proposal has recently passed to integrate MakerDAO’s DAI Savings Rate (DSR) with Origin Dollar.
Launched in 2018, the DSR supports DAI’s peg by allowing users to deposit DAI in order to earn interest. The low-risk yield strategy is incredibly robust, currently generating 8% APYs for participating users. As more users deposit to the DSR, yield is expected to compress as follows:
However, not all users can utilize the DSR at present. This is due to restrictions imposed on Maker’s DeFi lending protocol, Spark. Spark is unavailable in the United States as a result of ongoing regulatory uncertainty. Additionally, VPNs do not work with the protocol.
Implementing the DSR strategy allows OUSD’s community to benefit from the high yield on offer without bearing significant additional risk. MakerDAO CEO Rune Christensen has voiced confidence in the yield product, asserting that the DSR poses “no additional risk compared to holding DAI.”
Notably, OUSD holders can expect a yield multiplier on their earnings, boosting yield beyond what can be earned from using the underlying strategies directly. Since OUSD held in non-upgradable smart contracts does not rebase, the yield earned by that collateral is sent to normal holders’ wallets. For example, if 10 million OUSD rebases and 5 million OUSD does not, the yield multiplier would be ~1.5x.
The DSR complements OUSD’s existing blue-chip strategies to provide some of the best risk-adjusted stablecoin yields in DeFi. OUSD holders enjoy best-in-class security and seamless usability without needing to lock up any funds.
Get OUSD now: app.ousd.com
Discover the rest of Origin DeFi’s groundbreaking ecosystem: oeth.com
Ethereum has transitioned from a proof-of-work consensus mechanism into proof-of-stake, which requires users to put ETH as collateral to secure the network. In doing so, ETH stakers earn staking rewards. However, self-staking has a few barriers to entry, such as a minimum deposit of 32 ETH, which equates to over $100,000 at the time of writing.
Additionally, solo stakers will need to learn how to set up a validator, purchase hardware that meets staking requirements, and maintain their node with zero downtime.
By abstracting these difficulties away for the user, liquid staking services allow anyone to deposit ETH and earn staking rewards from their capital.
Liquid staking is a service provided by both DeFi protocols and centralized exchanges alike. By aggregating user deposits into a staking pool, liquid staking platforms help users meet the 32 ETH threshold.
Liquid staking protocols also provide a validator service, keeping up with the required hardware and software requirements. Users simply pay a percentage of their rewards for the service and keep the rest of the yield.
For many, the benefits of liquid staking outweigh traditional staking.
The main differentiator between how liquid staking works and a simple staking service is the issuance of liquid staking tokens (LSTs). When a user deposits their ETH, they receive a token that represents their staked asset, allowing them to use it in decentralized finance (DeFi) or other platforms. Since the token is transferable, users can sell or buy it on the secondary market, hence the term “liquid”.
Here is a breakdown of the most popular liquid staking options below.
Lido liquid staking is the most popular option by far, with over 60% of LST market share and over $30B of TVL. The liquid staking protocol issues the stETH token to depositors, which is well integrated into a number of DeFi protocols, such as EigenLayer, Aave, and Uniswap.
When Ethereum first introduced proof-of-stake, many were concerned by the inability to withdraw staked ETH. Lido addressed this pain point by incentivizing a stETH/ETH liquidity pool with LDO, allowing it to trade close to 1:1 with ETH. With the elevated APY, many users began to stake with Lido and provide liquidity.
The deep liquidity base attracted more stakers who became assured of liquidity, and also allowed DeFi applications to integrate stETH into lending markets and yield derivative products. Aave, for example, could onboard stETH as collateral only after they were confident they could liquidate it if it was at risk of defaulting.
By increasing utility for stETH, Lido further cemented its position as the market leader for LSTs.
Rocket Pool is a unique competitor in the LST landscape, prioritizing security for users and the health of the Ethereum network over maximum returns. Instead of controlling the validator set, Rocket Pool allows anyone to become a validator for depositors’ staked ETH. By requiring them to post ETH and RPL as collateral, Rocket Pool ensures these validators are financially aligned with the success of the protocol and depositors.
Though validators have to be compensated for the increased requirements, Rocket Pool’s stakers are willing to receive lower staking yields in exchange for a more robust security model and increased decentralization for Ethereum.
Frax, a stablecoin DeFi protocol, is one of the latest participants to join the LST vertical. Its frxETH token acts as a stablecoin to maintain a 1:1 value with ETH, while its sfrxETH is a yield-bearing LST.
By utilizing its ecosystem of products, Frax was able to quickly bootstrap its staked ETH TVL to over $800M, becoming a leading protocol in the space. Due to its large vlCVX position, Frax was able to incentivize frxETH LP yields on Curve, thus attracting frxETH minters.
With its own lending market, Frax’s LSTs were integrated into Fraxlend, where users can deposit Frax LSTs as collateral to borrow FRAX, a USD stablecoin. Furthermore, Frax has its own native bridging contracts and allow Frax tokens to be bridged onto other chains.
With staking yield compressing as more stakers enter the market, Origin Ether attempts to address decreasing ETH yield with additional streams of income. On top of ETH staking yield, OETH holders earn from several streams of rewards.
OETH yield is enhanced through its integration with ssv.network, which boosts staking APYs by offering SSV token incentives. Additionally, its AMO strategy enables highly capital efficient liquidity mining on Curve and Convex, further boosting yield for holders.
The decision to stake ETH depends on each users’ personal risk tolerance and goals. Certain users may prefer holding plain ETH in their hardware wallet, minimizing any counterparty risk or potential mistakes they make. Others may choose to self-stake to support the network, while others simply go for the highest returns.
If you prefer to passively earn ETH yields via an aggregator which has proven strategies and tier-1 audits, look no further than OETH. All strategies can be monitored directly on-chain, and currently boasts a trailing 30-day APY above 7.5%. Head over to OETH.com to read more.
