RFC - Add $gOHM Cauldron

RFC - Add $gOHM Cauldron

Introduction: gOHM as collateral

Everyone remembers the rebase phenomenon, hyper inflationary mint cascade of revenue. What resulted of that delirium is two protocols that are in exceptional position to thrive in DEFI. Wonderland and Olympus.

gOHM has proven itself to be one of those most stable forms of collateral in DEFI.


gOHM is composed by different assets, here is a screenshot that should explain exactly what is it backed by.

Eventually, this market is going to turn and I see gOHM being a position that maintains relative wealth in these markets with diversified risk. Market liquidity for gOHM is more than adequate for issuing MIM against.

With that being said I would like to see the community open a discussion utilizing gOHM as collateral for MIM.

Parameters For Cauldron

  • Borrow Fee: 1%
  • LTV: 75%
  • Liquidation Fee: 10%
  • Initial Top Up: up to 3M MIM; 250K MIM weekly

Rent Period: MIM is rented for 90 days at a time
Oracle/Liquidity Considerations: Uniswap,sushi,balancer,curve,Frax
Risk Considerations: smart contract, market value of gOHM in relation to treasury assets.
Protocol relationship: future potential to revisit scaling POL

gOHM Market Dynamics

Base Rate: 7.3%
-I propose a base rate of of 7.3%, which matches the underlying asset inflation of OHM.
-MC:Treasury > 1.2
-To further tune the dynamics of this Cauldron, as the market cap of the asset exceeds its underlying treasury value- the rate increases 100BPS weekly when MC:Treasury ratio exceeds 1.2

-MC:Treasury < 0.8
-When the marketcap:treasury ratio is below 0.8, the rate of the cauldron drops 100bps weekly with a floor of 4.3%

Borrow/Rent Period: I’ve added a rent time for the collateral in 90 day periods. Holding MIM beyond 90days against this collateral w/o reminting MIM will result in an immediate surcharge of 1000bps over market rate for the cauldron position. (17.3% +or- MC:Treasury premium or discount market rate)

Issuance: Each week after the delivery of the cauldron by the abracadabra team, 250K MIM will be eligible to be issued to Rent with an expiry at the end of the 7 day period. This coincides with roughly 3million MIM borrowed against gOHM per 90days at Max utilization.

Expected Revenue

  • At max utilization this provides roughly 84K in protocol revenue every 90 days or 334k a year.

Technical Details

gOHM contract: 0x0ab87046fBb341D058F17CBC4c1133F25a20a52f

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Wouldnt hurt to try!!! Sounds like a good idea to me… :man_mage:

I think its something we can explore.

What we miss here are:

  • Parameters For the Cauldron
  • Which Oracle we want to use
  • Risk assessment in terms of volumes, liqudity and risk in the token.

Once done, we can move this forward!


For reference, proposal for ohm at aave

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Okay interesting proposal a few suggestions:

For us to be okay having assets that are not deeply liquid as a collateral, we will need to increase the interest.

I think we should target between 10 and 15%.

For us to be able to have a borrow period it would require a whole new technology in the cauldrons, which is something we might not want to do right now.

Overall I think a good idea would be to accept gOHM as collateral in a Cauldron V4 market with variable interest, starting at around 15%.

The next thing would be to check how much liquidity gOHM has and how liquid this is to find a correct liquidation fee + LTV parameters.

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Added a bit of formatting after the go ahead from @Shibaattacknow !


Thats perfect!!! Would be taking on vulnerabilities with the addition of new technology to a cauldron, but definitely would prove worth the effort!! Hopefully the team can find time in the future to figure out the safest way to do this, definitely a lot going on!! You do an awesome job Frog-e, appreciate having you around to learn from! :man_mage::frog:

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For the time being. Their is not ample liquidity to provide a healthy system to borrow from gOHM at scale . Will re evaluate this opportunity in the future


Of note, gOHM is now available as collateral to borrow Frax on fraxlend


I’ve revisited the idea of gOHM and think having the cauldron infrastructure is worthwhile if the team agrees. MIM allowance should be greatly reduced to 200-500K MIM. LTV 75% , Liquidation Fee 10%, Liquidity would be sourced from SUSHI on Arbitrum. Base rate- as perscribed by Team, but I think 10% is competitive.

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Oracle used by Fraxlend.

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