Origin Ether (OETH) is an ETH-pegged token that enables holders to earn highly competitive yields in an automatic and passive way. OETH is optimized for ease of use, superior APYs, and security. Origin's LST yield aggregator is backed by ETH and ETH liquid staking tokens (LSTs) such as stETH, rETH, and frxETH.
The protocol provides a diversified and easy way to earn the best ETH staking returns as well as earn trading fees and rewards tokens from DeFi strategies. Because OETH is a rebasing token, users accrue enhanced yields by simply holding the token in their wallets. After users convert their ETH or LSTs to OETH, there is no additional work required (e.g. staking/unstaking, harvesting rewards, or manually reallocating capital).
OETH is starting as an ETH and LST yield aggregator, but we anticipate native yield generation opportunities to further scale yield in the mid to long-term. Origin DeFi Governance (OGV) is the value accrual and governance token for Origin Ether.
OETH promises to deliver access to higher yield, increased diversification, and protocol guaranteed liquidity. I don’t own enough ETH. You don’t own enough ETH. None of us own enough ETH. OETH solves this.
Origin Ether uses its collateral to earn yield from various sources. Yield on OETH is generated using proven strategies that have seen hundreds of millions of dollars flow through them. By default, OETH held in smart contracts doesn’t earn yield, and the earnings from these tokens are re-routed to normal holder wallets. A key distinction between a traditional LST and OETH is that Origin Ether earns from both staking rewards and DeFi strategies.
The three main categories for OETH yield sources are validator rewards, trading fees, and rewards tokens.
Origin Ether grows its ether balance via staking rewards from sfrxETH, stETH, and rETH. Yield is then boosted on rETH through Balancer's rETH/WETH liquidity pool, and similar strategies can be utilized for other LSTs. By holding a basket of liquid staking tokens, Origin Ether optimizes validator rewards while providing a diversified entry into liquid staking.
Origin Ether earns additional yield from its Convex AMO strategy. OETH collateral is used to provide liquidity to the OETH-ETH pools on Curve and Convex, allowing holders to earn boosted yield from trading fees on these liquidity pools. Lastly, OETH earns yield from accruing rewards tokens, including CRV, BAL, AURA, and CVX.
Importantly, Origin Ether’s rebasing function effectively leverages yield earned for OETH holders. Due to many smart contracts being unable to support rebasing, a significant portion of OETH held in smart contracts forgoes yield. The collateral used to mint these tokens is still used to earn yield which is sent to regular OETH holder wallets.
The ETH staking and LST markets are primed for massive growth in 2023 and beyond. Before Ethereum's Shapella upgrade, less than 15% of ETH total supply was staked to validate Ethereum’s network. As of November 2023, this metric has increased to over 23%. Ethereum staking participation currently pales in comparison to Solana (68% staked), Cardano (72% staked), Polkadot (46% staked), and Avalanche (62% staked). Of the 23% of Ether staked, around 45% is provided through LST providers like Lido, Coinbase, Frax, and others.
However, with Ethereum’s Shanghai upgrade removing withdrawal risk, ETH staking participation has increased dramatically. With a total addressable market of all ether in circulation, the ETH staking market is in its infancy. And now that ETH staking withdrawals are enabled, staking participation is projected to continue increasing (Delphi Digital). Over the long-term, it’s not inconceivable that 60-75% of Ethereum will be staked to secure the network.
In addition, LSTs will become more liquid and have far less depegging risk going forward. They will be used even more broadly as DeFi primitives and money legos. However, liquid staking is a highly concentrated sector, with just a few players dominating the market. Lido currently dominates the LST market with 75% market share, followed by distant second and third players Coinbase and Rocket Pool. This presents single points of failure for Ethereum’s network, becoming increasingly more of a threat as regulators crack down on digital asset staking.
As an ETH staker, it is therefore prudent to spread ETH staked across a variety of diverse staking strategies or LSTs. Further, as the market continues to fragment with new entrants, there are opportunities to earn more competitive yields by using LSTs that are also offering additional rewards through strategies in DeFi. OETH tackles both the diversification and yield optimization challenges elegantly by providing holders with an easy, passive way to earn higher yield with exposure to numerous LSTs.
Origin Ether (OETH) is a yield-bearing, ether-pegged token that is backed 1:1 by top liquid staking tokens and ether. Audited by OpenZeppelin, Narya, and others, OETH harnesses industry leading security and capital efficiency while providing a yield-bearing asset outside of the traditional financial system.
Users mint OETH by depositing ETH and accepted LST collateral. Utilizing a variety of strategies, the protocol earns yield constantly without requiring any further work by users. Yield earned on OETH is distributed to holders at least once per day, directly to their wallets with no gas fees required. As an example, a user may have 1000 OETH at the beginning of the year and receive an additional 90 OETH throughout the year (with an example 9% APY throughout the year).
Origin Ether follows the ERC-20 token standard while also enabling Origin’s unique auto-compounding rebasing dynamic. There’s no need to unwind staked positions to harvest yield, as yield is routed directly to user wallets at least once a day. OETH can be sent and received similarly to ether, traded on exchanges, or burned for its underlying collateral.
Origin Ether's wrapped token, wOETH, is an ERC-4626 vault. Yield on wOETH accrues to the token price instead of rebasing. This allows for more streamlined DeFi integrations and may have tax benefits depending on your jurisdiction.
Origin Ether will support WETH, stETH, rETH, and, frxETH for deposits at launch. Users can also deposit ETH and sfrxETH to mint OETH, but these tokens are sent through Origin’s Zap function before being deposited as WETH or frxETH to the vault. Importantly, OETH is a fully liquid asset. Users can enter and exit at any time.
OETH can be traded for ETH via decentralized exchanges or be redeemed for its underlying collateral through the Origin Ether Dapp, or directly through its smart contracts. The simplest way to exit an OETH position is through Curve, or other decentralized exchanges, where you can swap OETH for ETH.
A portion of ether sent to the Origin Ether vault is used to provide liquidity for trading OETH on AMMs. This protocol-owned liquidity ensures users can swap OETH to ETH without having to do a direct redemption. The OETH protocol also supports direct redemptions, giving users the option to burn their Origin Ether for underlying collateral. Withdrawals are permissionless and instant. There are no gatekeepers, and there’s no withdrawal queue or cool-down period. Upon redemption, users are sent a basket of assets proportional to the underlying collateral allocations.
Liquidity ProvisionOETH primarily earns liquidity provisioning yield through automated market makers (AMMs). The initial liquidity provision strategy for Origin Ether used Curve and Convex to earn trading fees and token rewards. The primary Curve pool that earns yield for OETH is the OETH-ETH pool, while other LST pools are in development using frxETH, rETH, and stETH.
In addition, Origin Ether will use an Algorithmic Market Operations Controller (AMO) strategy within the OETH-ETH liquidity pool, allowing for protocol-owned OETH to be used to provide additional liquidity on the AMM. This allows for Origin Ether to perform open market operations within these pools while helping to maintain the OETH-ETH peg.
In addition to Curve/Convex strategies, Origin Ether uses Balancer and Aura to optimize OETH rewards. Balancer is another proven AMM that offers innovative liquidity pools involving more than one token and has a growing meta governance ecosystem similar to Curve’s. The leader in Balancer’s governance token emissions is currently Aura, a protocol forked from Convex. Origin Ether taps into yield opportunities using Aura, further boosting incentives for OETH holders.
Gaining exposure to a diversified set of liquid staking tokens is a core strategy for Origin Ether. OETH holds Rocket Pool ETH (rETH), Lido Staked ETH (stETH), and stakes Frax Ether (frxETH) to earn validator rewards on top of token rewards and trading fees from AMMs. These same LSTs can be provided as liquidity to various Curve and Balancer pools when market conditions are favorable.
In the future, other LSTs may be added as supported collateral for OETH, such as cbETH. Prior to being whitelisted for minting OETH, each LST must be approved by decentralized governance and must pass a rigorous evaluation to identify any new risks that would be introduced to the protocol. Most assets will not meet this criteria due to our focus on security and our standards for safety and decentralization.
Rewards tokens are earned by the OETH protocol and converted into ETH to mint new OETH. This new OETH is sent to holders via rebasing, allowing yield to be automatically compounded in user wallets. Harvesting rewards tokens requires a meaningful amount of gas, so the Origin Ether protocol offers a bounty to whoever is willing to perform this work. Anyone can call the harvest function and earn a portion of the resulting rewards as an incentive to pay gas for the transactions. This creates a self-incentivizing system that operates at a known cost to the protocol. Incentivized harvesting is a great example of how the protocol is designed to be decentralized, permissionless, and self-sustaining.
OETH’s yield aggregation strategy will provide industry-leading yield through phase 1 of the protocol. We anticipate that OETH will outperform the APY of LSTs even at a high TVL. Holding LSTs allow Origin Ether to, at a minimum, match the yield from liquid staking tokens, while providing liquidity on AMMs enables OETH to beat yields offered by these staking products.
As liquid staking matures, yields will gradually compress for a variety of reasons. First, native ETH staking yields will come down as the total amount of ETH staked increases. Secondly, liquid staking products are expected to reduce their token incentives as liquidity becomes less critical after Ethereum’s Shanghai upgrade enabled staking redemptions. We anticipate that these rewards will continue to diminish, presenting a need for higher yield through sustainable strategies.
We expect that Origin Ether will eventually generate native yield. This will be done by creating a distributed set of ETH validators using cutting edge protocols to ensure safe, secure, and diversified staking that simultaneously creates an opportunity for additional rewards.
We anticipate incorporating Distributed Validator Technology (DVT) to improve security, robustness, and decentralization. Current validator solutions usually depend on either the user managing their own validator keys or trusting a service to manage keys on their behalf, both of which have security risks. Key mismanagement and/or security breaches can lead to loss of funds. Also, current validators are directly dependent on the operator node that they’re run on. If a service operator goes offline or is attacked, all validators run by that service are at risk. Current validator solutions try to mitigate this risk by whitelisting operators in a permissioned manner which adds another layer of centralization risk.
The protocol plans to address these issues by utilizing DVT to securely split a validator key amongst several operators who work together to perform validator duties in a robust network. In this model, no one operator issue can impact the whole since other operators help share responsibility. This vastly improves security, as no one party has access to or can control the validator keys. This also increases the robustness of the network. If any one operator is compromised (loss of keys, downtime, etc.), the other operators can continue to perform validator duties with no impact. Finally, the technology enables operators to join the network and work together in a trustless manner without the need for whitelists or permissioned onboarding, improving overall decentralization.
EigenLayer and “restaking” represent an interesting opportunity on our roadmap that could provide higher yield for Ethereum validators and OETH holders. EigenLayer enables restaking, permitting validators to secure several services at once with the same capital via the concept of shared security. Restaking promises to enable the rehypothecation of staked ETH, giving extra rewards to those who opt-in to accepting higher slashing risk. Given the technical challenges involved with participating at the consensus layer, we see a huge opportunity for OETH to make these yields accessible to everyone in a user-friendly way. As of November 2023, Origin Ether has qualified to get listed on EigenLayer, with an integration likely coming around the end of the year.
OETH makes it simple for DAOs, DeFi protocols, and institutions to earn yield on their ether. Acting as a DeFi money lego, Origin Ether supports key features that streamline the OETH integration process.
Origin Ether can provide benefits for users that take part in lending, liquidity provision, leverage, and borrowing. Anywhere that ETH is used in DeFi, OETH can be used instead, earning holders yield while participating in Ethereum’s ecosystem. Right now, the base pair on most AMMs is ether, but liquidity providers leave earnings on the table as that ETH could be earning yield. With Origin Ether, liquidity providers can earn yield from staking rewards while earning additional yield from liquidity provision.
In addition, Origin Ether will launch with an alternative, wrapped version of OETH: wOETH. Wrapped OETH is a tokenized vault that accrues value directly to the token rather than through rebasing. The token follows the ERC-4626 standard, and it will not trade at the price of ether, as the value of each token increases as rewards are harvested. This makes it much more simple for protocols to integrate OETH without needing to account for the token’s rebasing dynamic.
OGV is an ERC-20 token that acts as the value-accrual and governance token for both of Origin's OTokens. In both cases, the token operates as a value-accrual and governance token.
The OETH protocol is governed by veOGV stakers that deposit their OGV tokens in Origin Ether’s staking contract for veOGV. Inspired by Curve’s vote-escrow token model, OGV holders can stake their tokens for up to 4 years to receive voting rights in the DAO. veOGV holders are then able to propose and vote on parameters that determine OETH’s collateral allocations to a variety of strategies. For the average user, allocations happen in the background, enabling them to passively earn yield while strategists manage funds in accordance with governance votes and pre-established risk parameters.
Operating fully on-chain, Origin Ether collateral and strategy allocations can be viewed transparently via a block explorer or on our website at OETH.com. veOGV stakers can vote on strategy allocations and future upgrades to Origin's OTokens through our governance portal.
OGV is also used as Origin's value-accrual token for OETH. OETH has a 20% performance fee (taken out before APY calculations), that is routed to the Origin DeFi DAO. 10% of all yield on OETH is used to buy back OGV and redistribute these rewards to stakers. The remaining 10% is used to accumulate DAO-owned CVX to help bolster OETH yield.
The OGV token has an initial circulating supply of 1,000,000,000 OGV and initial total supply of 4,000,000,000 OGV that will be fully distributed after four years. The OGV tokenomics cannot be altered without decentralized governance approval.
OGV tokens are broken down into the initial allocation:
The vast majority of all tokens are being distributed to non Origin-controlled parties, therefore preventing a majority control of voting power by Origin or its entities.
Origin Protocol did not participate in private or public fundraising for OGV. The token was launched to the community in July of 2022 with the goal of maximizing distribution and accelerating decentralized governance. The majority of tokens will be distributed to our token holders and liquidity providers over the next few years.
As mentioned above, OGV holders can stake OGV to receive veOGV through the OETH staking protocol. veOGV holders earn protocol revenue and control the token rewards acquired by the Origin Ether protocol. The OETH protocol initially takes a 20% performance fee from yield earned on OETH.
Subject to decentralized governance, veOGV holders can choose to change protocol fee percentages, direct value-accrual directly to OGV stakers, or acquire new tokens for the Origin Ether protocol. OGV stakers voted to implement OGV buybacks in October, changing the way protocol fees are utilized by the DAO.
The number of OGV tokens earned through staking OGV for veOGV depends on the amount of OGV staked and the length of time the tokens are staked for. OGV holders are not required to stake their tokens, but they must do so in order to vote and to receive veOGV staking rewards.
Origin Ether was created by Origin Protocol Labs and is governed by the existing community of OGV stakers. While some core contributors are still affiliated with Origin, we expect an increasing number of independent, open-source developers to contribute to the protocol’s development––as we’ve seen a large number of decentralized governance voters come from the community.
Origin was founded by Josh Fraser and Matthew Liu, two successful entrepreneurs who have built multiple venture backed companies that saw successful exits and who have worked together on multiple businesses in the past. They were joined by a Paypal co-founder, executives from Coinbase, Lyft, Dropbox, and Google, as well as many world-class engineers from iconic web2 startups to help build Origin Protocol.
Origin’s lead investor is Pantera Capital, the world’s oldest cryptocurrency fund. Other notable investors include Foundation Capital, Blocktower, Blockchain.com, KBW Ventures, Spartan Capital, PreAngel Fund, Hashed, Kenetic Capital, FBG, QCP Capital, and Smart Contract Japan. Well known angel investors include Steve Chen, founder of YouTube, Alexis Ohanian, founder of Reddit, Garry Tan, partner at Y Combinator, and Randall Kaplan, founder of Akamai.
The community currently comprises hundreds of thousands of users, from all across the globe. Tens of thousands of users around the world share a common vision for permissionless protocols that democratize access to the best yields available in DeFi. Origin is proud to offer this through the most robust and secure DeFi protocols currently available, starting with Curve, Convex, Lido, Rocket Pool Ether, and Frax Ether.
Before Origin launched its first yield-bearing token in 2020, top-of-market DeFi yield was reserved for whales. Origin DeFi makes it possible for everyone to earn sustainable, elevated yield, and we’re proud to be expanding our offerings beyond fiat-pegged stablecoins.
Origin DeFi's vision extends far beyond the present moment, and its commitment to transparency, security, and seamless UX sets a strong foundation for long-term growth. As yield-bearing assets become increasingly popular, Origin DeFi aims to make its OTokens household names. Furthermore, Origin DeFi’s yield-bearing tokens should be used as ubiquitous assets, earning yield for business owners, institutions, investors, and anyone with an internet connection.
We believe that Origin DeFi is at the forefront of a new era in DeFi and cryptocurrency, and we're thrilled to be a part of it. The landscape of liquid staking is developing at a breakneck pace, with yield opportunities emerging just as quickly. OETH is Origin’s largest DeFi product to-date, and we're excited to see how Origin DeFi will continue to innovate and evolve in the years to come.
