title: Treasury Utilization Opportunity with OUSD category: treasury investment author: Peter of Origin Protocol <firstname.lastname@example.org> created: 2023-02-06 replaces: n/a dependencies: n/a
Convert USD250k - 500k of Rook’s idle treasury USDC or DAI per quarter for 12 quarters into Origin Protocol’s stablecoin OUSD to generate yield, beginning 90 days after proposal ratification and 1 month after a 50k test OUSD transaction.
 OUSD Website
 OUSD Documentation/Gitbook
 OUSD App
 Rook Expected OUSD Return Calculator
 OUSD Smart Contract Audits
 InsurAce Rating
 OUSD Governance Docs
 OUSD Historical APY 3-month
 OUSD Historical APY long-term
 API Endpoints
 Origin Protocol Team and Community
By converting a portion of the treasury’s idle stablecoin into OUSD and holding the tokens within the treasury wallet, Rook will continuously earn passive yield without having to stake, manage a position, or interact with other protocols.
- Initial 50k investment will be considered a test transaction, to allow the DAO enough time to select a treasury team and set up necessary dashboards/reporting, and to ensure rebasing is enabled and is functioning properly
- 250k - 500k quarterly investments can be increased, paused, or unwound at the discretion of the treasury team, with input from the Rook community, DAO, and core team
- Opportunity to receive bonus OGV tokens
Investment amount and type
- Yield Generating, Strategic
Origin envisions and strives towards financial opportunity for all. OUSD was developed to be permissionless and open to anyone - not to be exclusive to institutions and accredited investors. An investment into OUSD aligns well with Rook’s shared mission of an egalitarian economy for all blockchain users.
Origin is appreciative of Rook’s unique decentralized exchange, protecting against MEV, and has been researching potential ways to integrate it into the OUSD ecosystem. In the meantime, Origin has authorized its treasury team to place test trades through Rook’s protocol, which they have done several times over the past few months with close to 100k USD between OUSD, USDT, USDC, DAI. These transactions can be seen within the Origin trading wallet list of Rook transactions . Origin has also been active in the Rook community, participating in weekly calls and communicating within Rook social channels.
Expected benefits for Rook
OUSD will passively generate yield while sitting in the Rook DAO treasury wallet, helping secure Rook’s future by extending the project runway each additional day it is held within the treasury.
The Origin Dollar (OUSD)
OUSD is an ERC20 stablecoin that generates yield while sitting in your wallet . It is backed 1:1 by USDC, DAI, and USDT at all times, and holders can go in and out of OUSD as they please. Yield is paid out daily and automatically (sometimes multiple times per day) though a positive rebase in the form of additional OUSD, proportional to the amount of OUSD held . OUSD’s yield of 4.78% (trailing 365-day APY as of February 6, 2023 ), comes from a combination of :
Lending collateral to Aave, Compound, Morpho, Curve, and Convex
Reward tokens (AAVE, COMP, CRV, and CVX) are automatically claimed and converted to stablecoin
A 25bp exit fee is charged to those who choose to exit OUSD via the dapp  (completely avoidable if using DEX or CEX); this fee goes back to OUSD holders
OUSD sitting in non-upgradable contracts (about half the OUSD in existence) does not rebase, instead the interest generated from those tokens is provided to those that can rebase
These 4 yield generating functions combined enable OUSD to generate higher yields than lending directly to any single protocol.
There are no lock-ups, terms, or conditions with OUSD; it’s completely non-custodial. Any web3 wallet should be able to support OUSD and its rebasing function, including hardware wallets, Gnosis Safe, and other multisigs. There’s no need to ever again give up the keys to a 3rd party platform, such as Celsius, Blockfi, or FTX, to earn yield.
OUSD rebasing happens at least once per day, but often multiple times per day. Yield earned from OUSD is always subject to compounding interest. Please use this calculator to estimate the OUSD return over the proposed 12 quarters, following the initial 50k test transaction . The calculations assume the investment is held within a rebase-capable wallet, like MetaMask or Gnosis Safe. On the calculator, cells in green are the investments made at the beginning of the month, while cells in orange are months with no OUSD investment. Parameters you may want to change and explore in the calculator are cells B70 - B73 and B76 - E79 (outlined in bold boxes). To change the OUSD APY or investment amount, select File > Make a Copy.
Potential Risks and Mitigation
There are four risks when using OUSD, and Origin is making sure to reduce each risk as much as possible:
Counterparty risk - OUSD is governed by stakeholders around the world. Everything from yield generation to fee collection and distribution is managed by a set of smart contracts on the Ethereum blockchain. These contracts are upgradeable with a timelock and are controlled by hundreds of governance token holders. While the initial contracts and yield-earning strategies were developed by the Origin team, anyone can shape the future of OUSD by creating or voting on proposals, submitting new strategies, or contributing code improvements. We intend for all important decisions to be made through community governance and limited powers to be delegated to trusted contributors who are more actively involved in the day-to-day management of the protocol.
Smart contract risk of the yield strategies - Origin is only using platforms for yield generation that have a proven track record, have been audited, have billions in TVL, maintain a bug
bounty program, and provide over-collateralized loans. Over-collateralization in itself, combined with liquidations, provides a reasonable level of security for lenders.
Stablecoin risk - Origin has chosen 3 of the largest stablecoins to ever exist to back OUSD, and they have stood the test of time and maintained their peg quite well through multiple bull and bear cycles. They have also demonstrated significant growth in circulating supply, so the Origin team is confident that the 3 stables will maintain their peg and that OUSD will remain stable. OUSD is also using Chainlink oracles for pricing data for DAI, USDC and USDT to ensure accurate pricing at all times.
Smart contract risk of OUSD - Origin is taking every step possible to be proactive and lessen the chance of losing funds. Security reviews of OUSD are prioritized over new feature development, with regular audits being done, and multiple engineers are required to review each code change with a detailed checklist. There are timelocks before protocol upgrades are launched, and deep dives into the exploits of other protocols are constantly being done to make sure the same exploits don’t exist on Origin contracts. Security is extremely important to the Origin team. 7+ audits have been done since 2020, all of which can be seen on Audits - OUSD, and OpenZeppelin is now on retainer . On-chain insurance protocol InsurAce awarded OUSD the highest possible security rating of AAA, which only 4 projects on the InsurAce platform have received .
Very little work is necessary to execute this proposal. The OUSD dApp is already available within the Gnosis app catalog. Rook will convert the USDC or DAI into OUSD using the OUSD dApp within Gnosis, and then will “Opt in” to yield generation by clicking the Opt in button within Gnosis or by calling the rebaseOptIn() function.
A screenshot of the Opt in button on Gnosis can be seen here:
Each week a governance vote is held to determine the best allocation of OUSD collateral between the whitelisted strategies, voted on by OGV holders . OGV is the governance token for OUSD, and any token holder can participate in these votes after staking their OGV for veOGV. Voters will often vote for the strategy that leads to the greatest yield generation, with strong levels of security in mind. OGV holders also have the ability to propose new yield strategies for OUSD.
Monitoring and Reporting
While there is no need to actively manage an OUSD position due to the automated features of OUSD, monitoring of the current OUSD APY, strategies, and backing collateral, is always available in real time on the OUSD Analytics page . A three month day-to-day OUSD APY can be seen on this page on the analytics site, updated daily, while a longer history of the OUSD APY is available via this Dune query [11, 12]. API endpoints containing OUSD data is also available via the API page of the OUSD docs .
Rook Treasury Team
Rook may choose to appoint a delegated treasury team to help keep track of the OUSD investment, participate in the weekly allocation votes, and make the USDC or DAI investments into OUSD each quarter. The treasury team will have the flexibility to choose between USD250k - 500k USDC and DAI to invest into OUSD each quarter, with input from the Rook DAO, community, and core team. The treasury team can choose to build the current Rook treasury dashboards and Dune queries, or build additional dashboards, around the OUSD investment. To assist with reporting and decision making, the Origin team can add the delegated Rook treasury team to a distribution list that will receive a weekly OUSD analytics report. Here is an example analytics email from November 2022:
OGV Bonus Terms
There are no lockups with this proposal, Rook can move in and out of OUSD as the treasury team, core team, DAO, and community desires. OUSD remains completely liquid at all times, and can be spent in the same way as its backing stablecoins, if unexpected expenses were to arise.
Should Rook invest $5M or more USDC/DAI from the treasury in OUSD, Origin would be willing to include bonus incentives to Rook in the form of OUSD’s governance token, OGV.
As a token of appreciation and to align incentives over the long term, Origin will give Rook up to 0.15% of the current total supply of OGV. Origin will provide Rook a payment of 0.05% of the initial OGV supply (2m OGV) over 4 years on this schedule, should Rook continue and not dissolve or reduce below its $5M OUSD allocation at which point all pending OGV payments described in this section would be removed:
$5m OUSD OGV allocation schedule
0.5m OGV after year 1
0.04166665m OGV per month for the 36 months following year 1
If during the first 6 months of initial deployment into OUSD, Rook has an average balance greater than $5M OUSD, there will be a linear increase to the amount of OGV provided to Rook up to a maximum of 0.15% initial OGV supply (6m OGV) at $30M OUSD allocation. If Rook decides to dissolve or reduce its OUSD position below the initial 6-month average established, the future OGV payment schedule will be recalculated based on the reduced allocation rather than the initial 6-month average.
By holding OGV, Rook will have the opportunity to participate in OUSD governance and will have a say in OUSD’s future. Additionally, OGV recognizes that Rook could be a key strategic partner and would like to offer an aligned incentive structure that encourages mutual success.
If the Rook treasury wallet holds less than $5M OUSD, it will still receive the daily OUSD rebase rewards, but will not be allocated any OGV tokens.
Official Team and Disclosure
Origin was founded by Web3 veterans Josh Fraser and Matthew Liu in 2017 and is one of the most venerable projects in the space. Origin has raised $38.1M from top investors including Pantera, Spartan Group, Foundation Capital, BlockTower Capital, Steve Chen, Garry Tan, and Alexis Ohanian, and currently maintains a multimillion dollar treasury. As a technology partner, Origin Story, released in 2019, has helped launch some of the largest NFT projects to-date:
· Paris Hilton Launches ‘Past Lives, New Beginnings’
· 3LAU Launches Record-Setting $11.7M Auction
· Charlie Bit My Finger NFT Sale Makes Headlines and Sets New Record
· Macallan Cask NFT Sells For $2.3 Million
· First Real Estate Sale via NFT Marketplace
In 2020, Origin Protocol’s second product, the Origin Dollar, was launched. In early 2022, OUSD reached a market cap of $298m, with no issues, and without diminishing the daily rebase payments; OUSD can easily function with scale. Since OUSD is backed 1:1 by its collateral assets at all times, and OUSD and its collateral are stablecoins, OUSD market cap = OUSD supply = OUSD TVL. The current OUSD market cap is ~$49m as of February 6, 2023, growing each day with each rebase .
Peter is a core member of Origin Protocol and is joined by the fully doxxed Origin team and community, which includes hundreds of thousands of members and open-source contributors . Many members of the Origin team, including both founders, are holding a significant portion of their personal wealth in OUSD. Origin Protocol’s corporate treasury is also holding millions of dollars in OUSD. We have skin in the game and are willing to put our own money at risk with the code we have written.
from within Gnosis Safe using the Origin Dollar dApp, Rook will convert 50k USDC or DAI into OUSD as a test transaction, within 90 days of proposal ratification
Rook will “Opt in” to yield generation
Rook with invest USD250k - 500k USDC or DAI into OUSD, 1 month after success of the test transaction
Rook will repeat the investment for the following 11 quarters, increasing, decreasing, or keeping the investment the same