Summary

Launch a Boosted Liquidity Engine for the wstETH/OHM pool on Balancer with a maximum vault capacity of $5m in wstETH. To match this, approve the minting of up to $5m in OHM for this vault in order for both assets to be deployed in a 50/50 liquidity pool.

Background

The Boosted Liquidity Engine (BLE) leverages Olympus’ competitive advantages (monetary policy flexibility and treasury strength) to mint OHM into liquidity pools with select high quality assets. LPs bring an asset (e.g., stablecoin, LSD) into newly developed vaults and the Olympus treasury mints OHM in equal value (for 50/50 pools) to match and create a complete LP position. LPs benefit from boosted liquidity mining opportunities and partner protocols are able to more efficiently drive liquidity mining programs and deepen supplemental liquidity for their tokens. Olympus benefits from LPs providing counter asset liquidity, enhancing OHM’s liquidity depth, which enables greater utility and stability. Furthermore, the BLE can be a powerful tool for partnerships. BLE is not intended to be utilized for any and all assets but rather select high-quality assets with which an OHM pairing would be beneficial.

For more information on the Boosted Liquidity Engine please refer to OIP-131.

Vault Details

The wstETH/OHM vault will be the first deployment of a BLE. As third parties add wstETH into the vault, the protocol will mint OHM to match this and deploy it into the liquidity pool and stake it to receive incentives.

All the reward tokens earned through this vault will be directed to wstETH depositors. The protocol itself will not receive these tokens, with the exception of trading fees which are accrued inside the LP token itself.

The proposed vault will launch with the following parameters:

• Maximum capacity: $5m in wstETH provided by third parties & $5m in OHM minted by the protocol.
• Pool: 50/50 wstETH/OHM on Balancer
• Incentivization strategy: Aura staking & LDO rewards
• Oracle: Chainlink
• Fee: 0%

Note that the maximum mint capacity is perpetual and can be utilized by the contracts until the vault closes and/or a governance vote changes these parameters.