(OGP10)-Launch Litter Box 3 on Arbitrum with Reward Program and Add New Markets Like Bored Ape Floor Price

This is a governance proposal to 1) Launch the third iteration of Overlay’s sandboxed launch, Litter Box 3 2) Launch Litter Box 3 on Arbitrum (as well as mainnet) 3) Launch an NFT based reward program; similar to Litter Box 1 and Litter Box 2 4) Launch new markets on Arbitrum (WETH/USDC, WBTC/USDC) 5) Launch new markets on Ethereum ( Bored Ape Yacht Club Floor Price/Ethereum via Chainlink feed).

---

Wen Litter Box 3? Now Litter Box 3.

Given the market conditions and the maturity of the protocol, it's undeniable that the protocol needs another version of Litter Box before its full launch. It's been over 100 days since the Overlay Protocol was launched in a gated, sandboxed environment, known as Litter Box. During this time, more than 70 unique wallets have used the protocol, creating over 200 positions through two versions of Litter Box (LB1 and LB2). As you already know, the supply of the protocol's native token, OVL, is dynamic. In its simplest form, if a position is successful, the smart contract mints OVL, and if the position is a failure, the smart contract burns OVL. The sustainability of this mechanism has been a source of curiosity since the day the Overlay whitepaper was written. Thus, LB1 and LB2 play an important role in the future sustainability of this mechanism. Throughout LB1 and LB2, more than 14,000 OVL have been distributed to more than 600 wallets. Even if the fact that most of the users haven’t even touched the tokens, more than 10% of the circulating OVL has been burnt. This is an undeniable indication of the sustainability of this mechanism. So… it’s time… for LB3…

---

Wen L2? Now L2. (ARBITRUM)

Throughout LB1 and LB2, the main complaint was not about the product itself, but rather the high gas fees associated with Ethereum, which made it difficult to convince people to open positions on the protocol. The NFT reward program was cool, but people were hesitant to spend over $20 on a single transaction for a beta product. So many options for this.. There’s tons of Layer 1s, Layer 2s, and side chains on the market waiting for new protocols to be deployed on. Arbitrum, an Ethereum L2, is probably the best one for Overlay, though.

Why? -Low gas fees. -Good security. -More than $1B TVL without even having a grant program. -Significant number of Ethereum OGs deploying on Arbitrum.

As ‘the most degenerate DeFi protocol’, Overlay’s should move forward with Arbitrum.

If the proposal passes, Litter Box 3 will be launched on Arbitrum. LayerZero will be used to bridge OVL between Ethereum and Arbitrum.

---

Wen NFT floor prices? Now NFT floor prices. (Only on Ethereum for now)

The proposal offers new markets for the new Litter Box. The need for exotic markets is undeniable for Overlay’s next phases. NFT floor prices have been one of the most desired data streams to be traded on Overlay, according to the community feedback. As the biggest NFT collection, Bored Ape Yacht Club is the first NFT collection that should be added to the protocol.

For the next steps:

-BAYC Floor / ETH (via Chainlink) feed will be added on Ethereum. -Additional NFT markets (via Chainlink) will be reviewed and proposed as add on markets on mainnet as quickly as possible, and with community approval. -The core team will work with NFTPerp to read their contracts for NFT prices on Arbitrum. -The core team will work with Translucent (or similar) to build out infrastructure to host own oracles.

---

Moving onto the next phase with OVL + PCD voting system

The last Overlay Governance Proposal, OGP-9, offered a new dual token governance for Overlay Protocol. Per this proposal, OVL and PCD NFTs are going to have a significant vote ratio in all new governance proposals. 1 OVL will have 1 Voting Power and 1 PCD NFT will have 100 Voting Power from now this Snapshot.

These are the two options offered on this Snapshot:

1) Launch Litter Box 3 with suggested proposal 2) Request changes for this proposal