Remove Risk-3 From OUSD Curation and Focus Allocation on Risk-1/Risk-2

Summary

This proposal updates OUSD’s risk policy by removing Risk-3 markets from active curation and focusing allocation on Risk-1 and Risk-2 markets.

The intent is to improve risk-adjusted yield by excluding markets with higher tail risk and limited incremental benefit, while improving the flexibility to allocate across Risk-1 and Risk-2 based on yield, liquidity, and market capacity.

Motivation

• OUSD is positioned as a stable, risk-aware yield product.
• Current market observations indicate most target outcomes can be achieved using Risk-1/Risk-2 markets.
• Maintaining Risk-3 adds complexity and additional downside pathways that are not currently justified.

Proposed Policy Change

• Remove Risk-3 markets from OUSD active curation.
• Keep Risk-1 and Risk-2 as the main active allocation buckets.
• Allow dynamic allocation across Risk-1 and Risk-2 without fixed hard caps, based on:
  • risk-adjusted yield
  • withdrawal/redeemability conditions
  • market liquidity and capacity
  • ongoing risk monitoring

Scope

This proposal is policy-only.

Included:

• Risk framework update for OUSD market curation.
• Post-vote curation/configuration changes by the relevant curator/operators.

Not included:

• No OUSD contract upgrade.
• No tokenomics change.
• No change to OUSD core redemption design in this vote.

Implementation (Post-Snapshot)

If approved, execution is performed as curation/configuration updates:

1. Remove or disable Risk-3 markets from OUSD active curation.
2. Reallocate any active Risk-3 exposure into Risk-1/Risk-2 markets.

Risk Levels (Definitions)

Risk Level 1: Secure, battle-tested platforms with deep liquidity and long history of stability.

Risk Level 2: Includes well-established protocols or newer versions of Risk-1 platforms. Higher yields come with a small amount of additional risk.

Risk Level 3: Emerging protocols and newer assets with higher yield potential but limited stress-testing.

More information on Risk Levels: Origin blog

Risk Management

This change is intended to reduce portfolio complexity and tail-risk exposure.

Key controls remain:

• liquidity-aware allocation
• active monitoring and alerts
• operational discretion to de-risk when market conditions deteriorate

Proposal authored by @rugolini