[ARC] Add support for Origin Dollar (OUSD) on Ethereum V3

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1pete proposed adding lend/borrow support for Origin Dollar (OUSD) stablecoin on the Aave V3 Ethereum market, aiming to create a new market for OUSD holders and increase Aave's Total Value Locked (TVL). The proposal, which excludes using OUSD as collateral, has sparked community discussion on potential risks and benefits, with the final decision pending.

The discussion primarily revolved around the proposal by 1pete to add lend/borrow support for the Origin Dollar (OUSD) stablecoin on the Aave V3 Ethereum market. OUSD, launched by Origin Protocol in 2020, is a unique stablecoin that generates yield while in the holder's wallet, similar to stETH yield mechanics. The yield is generated from deploying the OUSD collateral (USDC, DAI, and USDT) across several protocols, including Aave, Compound, and Curve. The proposal suggests that enabling lend and borrow support for OUSD on Aave will provide a new market for OUSD holders and increase the Total Value Locked (TVL) for the Aave protocol1.

1pete provided a comprehensive overview of OUSD, including its current status, methods of obtaining, community stats, technical specifications, and security considerations. He also discussed the risks associated with using OUSD and the measures taken by Origin to mitigate these risks. These include counter-party risk, smart contract risk of the yield strategies, stablecoin risk, and smart contract risk of OUSD. Origin is taking steps to reduce these risks, such as using platforms for yield generation that have a proven track record, choosing stablecoins that have stood the test of time, and prioritizing security reviews of OUSD over new feature development1.

The proposal does not intend to enable OUSD to be used as collateral, hence no risk parameters are included in the proposal. 1pete suggested implementing OUSD supply and borrow caps for the first 90 days or until the Aave community becomes more familiar with OUSD. The reserve factor will remain at the standard 10% for stablecoins. They also proposed an initial interest rate model similar to USDP, but are open to suggestions from Gauntlet, Llamaxyz, and the Aave community1. The proposal has sparked a discussion among the community, with MarcZeller asking the risk teams to check for potential issues to onboard an asset that has part of its collateral already LP into Aave2, and ChaosLabs stating that they do not perceive a significant market risk or a risk associated with the composition of the OUSD backing5. The final decision on the proposal is yet to be made.

Posted a year ago

Last reply 8 months ago

Summary updated 2 months ago

Last updated 05/12 01:14