Nouns DAO

Stacking Treasury Yield With OETH 2.0

Relevant Proposals:

On Nouns: https://nouns.wtf/vote/18 - Stake 1 eth in Lido https://nouns.wtf/vote/22 - Stake 10% of treasury in Lido https://nouns.wtf/vote/30 - Stake additional 10% of treasury in Lido https://nouns.wtf/vote/52 - Increase Treasury stETH Position to ~20% https://nouns.wtf/vote/217 - Stake additional 5k ETH in Lido https://nouns.wtf/vote/227 - Stake additional 5k ETH in Lido https://nouns.wtf/vote/313 - stETH peg protection https://nouns.wtf/vote/810 - Unstake 1k stETH (to be used for treasury diversification)

On Lil Nouns: https://lilnouns.wtf/vote/165 - 1 ETH Experiment: Generating Diversified Yields with OETH https://lilnouns.wtf/vote/203 - The coveted staking prop

Summary:

This is a proposal to convert 300 ETH into Origin Ether (OETH) to both increase yield and increase LST diversity for the Nouns treasury.

This proposal will include two transactions: the first to convert ETH into OETH, and the second to opt-in the Nouns wallet for yield generation.

Abstract:

I am Peter from the Origin Protocol core team. This is a proposal to both increase the yield of the Nouns treasury ETH/LST, and increase LST diversity, by utilizing Origin Ether (OETH). This proposal was inspired by the proposal to unstake ETH from stETH to be used within other LSTs for increased treasury diversification.

Motivation:

Origin submitted a 1 ETH proposal to Nouns back in 2023 to test out safely earning the DAO’s ETH a yield through using OETH. However, this proposal did not pass, largely due to poor timing and disagreements with the fork.

The proposal to Nouns was later followed up with a 1 ETH proposal to test staking OETH within the Lil Nouns treasury. After several months a supplementary proposal was passed to stake a larger amount of ETH into OETH, where the Lil Nouns treasury has been safely earning a yield ever since. OETH performance reports were shared with the DAO after 30, 60, 90, and 180 days to give the DAO full transparency of OETH’s performance alone and versus Lido’s stETH, RocketPool rETH, and Frax’s frxETH. We believe OETH has now been used within Lil Nouns long enough to warrant another attempt at a proposal for Nouns to safely use OETH for both yield generation and treasury diversification.

As mentioned from proposals 18, 22, 30, 52, 217, 227, and now 810, it is clear that the Nouns community is once again interested in earning yield on the treasury and extending the project runway. Proposal 810 signals that the community would prefer to continue earning yield with LSTs other than stETH, rather than eliminating risk completely and converting LSTs entirely back to ETH to be untouched.

OETH yield is currently at 3.26% APY, whereas frxETH is down to 3.07%, stETH is down to 2.82%, and rETH is down to 2.58%. We are proposing to begin with 300 OETH, and can submit an additional proposal in the future to increase the amount as the community and DAO sees fit. This proposal was not meant to replace the mETH proposal from Mantle, but rather to compliment it, and further increase diversity between LSTs within the Nouns treasury.

OETH Overview

Origin Ether was launched in May 2023 and is an ETH-pegged ERC20 that generates yield while sitting in your wallet. Similar to stETH, OETH yield is paid out daily and automatically (sometimes multiple times per day) through a positive rebase in the form of additional OETH, proportional to the amount of OETH held. OETH is a full-fledged LST with an extremely tight peg (1:1 redemptions to ETH thru Origin’s ARM and high yields thanks to DVT direct staking. OETH earns its yield from 3 core components:

• Beacon chain staking through SSV/P2p
• The Curve AMO
• Those opted-out from receiving the yield - any users LPing in a dex pool are giving up their OETH yield (in exchange for trading fees & emissions) to those opted-in, leading to a boost in yield

OETH’s meticulous design provides increased yields while protecting against centralization and slashing events. Current and historical OETH yields can be seen via the OETH analytics page at all times. Proof of Yield tracks every OETH yield event as the yield is distributed.

Obtaining OETH is seamless, Nouns can convert from ETH into OETH via any of the following methods:

• Minting via the OETH Zapper - (transaction #1 of this proposal)
• Minting on OETH.com
• Swapping on Curve
• Swapping on Uniswap

Security Risk Mitigation

OETH has been operational for over 2 years with a TVL of 47,000+ ETH ($130m+), zero exploits or security incidents to date and has demonstrated a strong commitment to smart contract security as shown by our past audits and active ImmuneFi bug bounty with a max bounty of $1,000,000 for critical findings. Origin has a continuous auditing agreement with OpenZeppelin and yAudit to review 100% of the OETH and OUSD smart contract changes. All audits can be found here.

External OETH risk assessments:

• Prisma Risk - Asset Risk Assessment Addendum: Origin Ether (OETH)
• LlamaRisk full collateral risk assessment supporting the onboarding of OETH to the Aave V3 instance
• Chaos Labs collateral risk assessment supporting the onboarding of OETH to the Aave V3 instance

Disclosure

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 OETH. Origin Protocol’s corporate treasury is also holding millions of dollars in OETH. We have skin in the game and are willing to put our own money at risk with the code we have written.

There are no lockups with this proposal, Nouns can move in and out of OETH as the Nouncil, core team, DAO, and community desires. OETH remains completely liquid at all times, and can be spent in the same way as its backing collateral, if unexpected expenses were to arise.