Summary: This proposal is to add the ability to manually turn on rebasing for an OETH address and specifically to turn on rebasing for the Eigenlayer address.
Background: OTokens work differently than most other tokens. Instead of the price increasing as the value of the assets under management increases, the contracts regularly update the balance in every token holder’s wallet to reflect the yield that has been earned by the protocol.
By default, OETH tokens that are held in smart contracts do not participate in the rebasing nature of the token and will forfeit any yield unless the smart contract explicitly opts-in. This is by design, and increases the composability of these coins within DeFi as many protocols weren't designed with the expectation that balances might change without a transfer event being emitted on-chain.
Last month, holders came out in force to support OETH during EigenLayer’s voting campaign. As a result, OETH became available as a re-staking asset on the platform starting Monday, 18th December at 10 am PT.
Based on discussions with the Eigenlayer team, Origin was under the impression that OETH re-staked with Eigenlayer would be opted-in to earning yield. Unfortunately, when the contracts went live, it was discovered that the Eigenlayer contract had not opted-in for yield.
It is a top priority to ensure the re-staked OETH earns yield as soon as possible, and the Origin team has discussed three potential solutions with the Eigenlayer team:
After reviewing the possibilities above, it has been determined that the third option above will be the fastest path to a solution and thus, that is what is proposed here.
Overview:
If approved, this proposal would signal the community's support for the following two steps:
[Note, the code to do this has already been written and reviewed and the on-chain governance proposal will be live within 24 hours. In the interest of avoiding any delay we are submitting this Snapshot proposal on a parallel path.]
Fortunately, creating a solution that addresses this problem for Eignelayer also smooths the integration process for other smart contracts that may want to opt-in to yield through our governance process in the future.