Merge OGV into OGN

Authors

Origin co-founders (Matthew Liu and Josh Fraser) and core team

Summary

This proposal aims to consolidate all of Origin’s suite of products and associated traction with a singular governance and value accrual token, OGN.

• OGN will merge with OGV, combining the fully-diluted valuations of both tokens into one.
• OGN will adopt a similar governance and value accrual mechanism as OGV, including the ability to stake OGN for vote-escrowed OGN for governance and economic rights (including OGN staking rewards). As a result, OGN will become more decentralized and have increased utility.
• The Origin Treasury will lock all of its converted OGN (from OGV merger) to vote-escrowed OGN, ensuring that there won’t be a significant increase in OGN’s circulating supply in the near-term.
• OGV holders and veOGV stakers will have 1 year to convert their holdings into OGN and vote-escrowed OGN respectively.
• Origin’s core team, open-source developers, and community members will all be aligned under a single token, OGN, enabling all ecosystem participants to be focused and share in the same incentives going forward.
• Origin’s core team, in addition to open-source developers and integration partners, will advance Origin’s products in an ambitious and compelling 2024 roadmap.

Opportunity

Origin is doubling down on DeFi. Currently, OGV is the governance and value accrual token for Origin’s DeFi products. OETH, primeETH, and OUSD currently account for $200M of TVL and dozens of integrations and use cases across DeFi.

TVL and protocol revenue is expected to grow considerably as these products continue to gain traction. OETH and primeETH are very well-positioned to capitalize on the explosive restaking market (e.g. EigenLayer), perhaps the hottest narrative and most disruptive technology of this market cycle. Meanwhile, OUSD’s APY is in the double digits as DeFi lending rates increase, making it far more competitive than US treasuries and other competitive products.

Currently, OGV’s market cap is $10.8M. When looking at comparable market caps in DeFi, OGV appears to be an outlier. Multiple community members and crypto researchers have noticed this fundamentals mispricing.

X.com post from @InfoSpace

X.com post from @Flowslikeosmo

OGV appears to be mispriced for at least several reasons:

• The ratio between the market cap of OGV and the amount of capital it controls is significantly below other similar DeFi projects.
• OGV holders govern over $1M of protocol-owned CVX.
• 2.3% of all distributed MORPHO tokens have been awarded to protocols governed by OGV. This can be a huge windfall for the Origin community as Morpho is a rising DeFi protocol with $1.2B of TVL.

We and many community members believe it is time to merge OGN and OGV and capitalize on these catalysts that can help a combined token perform better than two separate tokens.

Through this proposed merger, OGN holders would benefit from 9-figures of TVL and consistent and growing protocol revenues being directed to OGN. OGV holders will benefit from holding a highly liquid token that is trading on all major exchanges and will join the OGN community that has hundreds of thousands of community members in all regions of the world. Both sets of stakeholders will benefit from a clear vision/narrative and focused and aggressive product roadmap. The Origin core team will benefit from having less overhead of interacting with two tokens and communities, allowing us to be more singularly focused in doing our part to drive value capture to OGN with a powerful DeFi ecosystem and Super DApp for all of Origin’s products.

Furthermore, we’ve recently seen the market react positively to other token mergers and migrations that consolidate product traction and value accrual to single tokens. For example, the Frax (FXS, FPIS) merger, Ribbon to Aevo migration, and MeritCircle to Beam migration have all been positively received by the respective communities.

Mechanics

We took a snapshot of OGN and OGV at April 1, 2024 12:00AM UTC. At that time, OGN was trading at $0.21731 and OGV was trading at $0.01986. Therefore, we propose that 1 unit of OGV will convert to 0.09137 OGN in the merger.

Total token supply was 4,483,581,550 and 1,000,000,000 for OGV and OGN respectively. OGV’s FDV was $89.0M while OGN’s FDV was $217.31M. This proposal aims for a value accretive merger, combining the two tokens for a FDV of approximately $306.31M.

To do this, the protocol would perform a one-time mint of 409,664,846 OGN to fully absorb all OGV. The vast majority of these minted tokens will not enter circulating supply.

• Note that over 85.7% of OGV’s total supply has not yet entered circulation, with circulating supply currently at 640,579,154 tokens. 3,843,002,396 of non-circulating OGV will convert to non-circulating OGN.
• In addition, of the 640,579,154 OGV tokens in the circulating supply, approximately 80% is currently locked as veOGV for up to 4 years. This further reduces near and mid-term circulating supply for OGN.
• Finally, the Origin Treasury is further committing to locking any OGN and vote-escrowed OGN that it receives from a successful merger.

Total OGN supply will increase to 1,409,664,846 OGN, with the vast majority of the increased supply being locked and non-circulating.

Current holders of OGV will be able to convert their OGV to OGN at the stated exchange ratio of 0.09137 OGN per OGV. veOGV holders can convert directly to vote-escrowed OGN to earn governance and economic rights. Or, they can choose to exit their staked positions to OGV without penalty. There will be a one-year limit for converting OGV and veOGV.

We will also work with the 8 centralized exchange partners who have listed OGV to figure out the best migration path if/when this proposal passes. The core team will no longer support OGV with products, token utility, or liquidity at the time of the merger. We welcome members of the community to continue to develop products for OGV if they desire.

Voting options

This proposal has two options:

• Move forward with the proposed OGN and OGV merger
• Keep the status quo and do not move forward with the proposed OGN and OGV merger

Voters that are in favor of a merger under different conditions are encouraged to vote No and then provide comments and proposals for alternative mechanics.

Next steps

If the proposal does not pass, the core team will continue building out OGN and OGV and their respective products separately.

If the proposal passes, we anticipate members of the OGV community to vote on whether to accept or reject the merger proposal from the OGN side. If that second proposal passes on the OGV side, the core team will begin development work to enact a value accretive and successful token merger.

Concurrently, the core team will also continue building new products for Origin’s ambitions and ecosystems. Look out for blog and social media posts in the near future providing more context about our yield-bearing tokens going multi-chain and the launch of a new Origin product, ARM.