Proposal: Onboard cvxOUSD (Convex Origin Dollar pool LP tokens) as Collateral

💡Idea Discussions
1

Context

Origin Dollar (OUSD) is a yield-aggregating stablecoin with that rebases positively to distribute yield directly to user wallets in the form of additional units of OUSD. OUSD is backed 1-to-1 by DAI, USDC, and/or USDT. These underlying stablecoins are deposited on Compound, Aave, Curve/Convex to earn yield on behalf of OUSD holders.

Currently, the OUSD-3Crv Factory pool is one of the largest and highest yielding pools on Curve. cvxOUSD is also one of the largest and highest yielding pools on Convex. Also, OUSD has been integrated with Yearn and has its own vault. There is an ongoing liquidity mining campaign that rewards OGN on top of protocol fees and CRV, CVX, etc.

Motivation

The OUSD-3Crv Factory pool on Curve has exploded in liquidity and it would be beneficial both to LPs, OUSD holders, and Abracadabra users to have cvxOUSD LP tokens accepted as collateral for borrowing MIM.

Proposal

Allow cvxOUSD LP tokens as collateral for borrowing MIM with the same pool specifications as cvx3pool (Maximum collateral ratio - 92%, Liquidation fee - 4%, Borrow fee - 1%, Interest - 1.5%).

Benefits

  1. Potentially higher return on stablecoin staking for Abracadabra depositors
  2. Increases liquidity for OUSD LPs

Considerations/Risks

The main risks associated with this are smart contract risks. OUSD was launched on Ethereum mainnet in September 2020 and has suffered one security incident pre-audit. Since then, OUSD has undergone multiple security audits by Trail of Bits, OpenZeppelin, Solidified, and Certora. Insurance for OUSD is available on Nexus Mutual and InsurAce. OUSD supply has also grown from less than $10m to over $200m.

We’re in the process of asking Chainlink to set up a new OUSD/USD feed. In the meantime, you may be able to use the USDT/USDC/DAI feeds since OUSD is backed 1:1 by those coins and is always redeemable for those underlying assets.

Links/Resources

OUSD Docs: https://docs.ousd.com
Source Code: Origin Protocol · GitHub
Governance: https://vote.originprotocol.com

OUSD smart contract:
0x2A8e1E676Ec238d8A992307B495b45B3fEAa5e86 / ousd.eth

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Just wanted to say thanks in advance for considering this proposal. We’re huge fans of what you guys are building and would love to find a way to collaborate. Let us know if you have any questions.