Gm Nouners! Peter here with an updated version of my previous OETH proposal to stack Nouns treasury yield though OETH

Summary:

This is the first step in a two-part proposal to convert 1000 ETH of Nouns treasury assets into Origin Ether (OETH) to both increase yield and diversify across multiple LSTs.

• Why now? Nouns recently signaled interest in expanding staking beyond stETH (Proposal 810 & 818). Current OETH yield is 3.37% APY, higher than stETH (2.80%) and rETH (2.58%).
• Impact: At 1000 ETH, this means roughly +7 ETH/year (~$30k) of additional yield compared to stETH, while reducing reliance on any single LST provider. A delegation to Nouns is also included in this proposal, giving Nouns governance rights in the Origin DAO
• Proposal Roadmap:
  • Step 1 (this proposal): unwrap 826 wstETH to ETH
  • Step 2 (follow up proposal): deposit into OETH, secure governance rights with xOGN, and bring Nouns to Origin’s community of thousands of ETH users

TL;DR: More yield, more diversity, longer runway, and a direct say in OETH governance.

Abstract:

I am Peter from the Origin Protocol core team. This is a proposal to increase the yield of the Nouns treasury ETH/LST and increase LST diversity by utilizing Origin Ether (OETH). This proposal was inspired by the Mantle 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 Nouns 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’s 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 in proposal 810 & 818, it is clear that the Nouns community is once again interested in earning yield on the treasury and extending the project runway. Proposal 810 & 818 signal 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. 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.

Specification:

There have been several changes from the last version of this proposal, developed from discussions within the Nouns community:

1. The amount of ETH in the proposal was increased from 300 to 1000. By having 1k OETH in the treasury, the treasury will be split 1/3 each between Lido, Mantle, and Origin LSTs, and will lead to a greater yield generation and diversification within Nouns. To achieve 1k OETH, Nouns will unwrap 826 wstETH as the first function in the proposal.
2. Origin will provide the Nouns DAO a delegation of xOGN, so that Nouns can participate directly within the Origin Protocol DAO. The delegated amount will start at the level equal to most current UGP delegates, or about 100k xOGN. The proposal to provide non-university organizations a governance delegation passed last week - with this delegation Nouns will have a say in each Origin Protocol governance vote, and will have enough voting power to submit new proposals on Origin’s snapshot as well as on-chain proposals on Origin’s dapp (something that is not possible on the Mantle snapshot if not whitelisted). OGN governance can directly update/improve OETH, as the OETH protocol is fully controlled by OGN (whereas the mETH protocol is controlled by COOK, which is a different governance token than the token Mantle delegated to Nouns)
3. Origin will co-market Nouns to Origin’s user base and community of thousands of ETH holders, users, and participants to ensure that the Nouns brand is in front of as wide an audience as possible.
4. At least one Origin Protocol representative will continue attending Nouns DAO/subDAO calls and/or events as we have been the last 2 years and will continue to be a direct line for any questions regarding OETH staking or the other Origin Protocol products. The Origin Protocol representative can also be used as a resource for insight in the greater ETH staking world.

Proposal actions

This proposal has 3 function calls:

1. unwrap the wstETH into stETH
2. approve the Lido exit queue contract
3. request a redemption (withdrawal) from Lido for its underlying ETH at a 1:1 rate

Step 2/2 of this proposal will feature 4 function calls:

1. Claim the ETH from Lido
2. Using the claimed ETH, Mint OETH at a 1:1 rate through Origin’s Zapper
3. Wrap the OETH into wOETH to avoid unnecessary daily income‑tax liability for the DUNA
4. Opt-in the Nouns wallet for yield

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 can be wrapped into a DUNA-compliant wOETH to change how the yield is received. wOETH is a ERC-4626 tokenized vault designed to accrue yield in price rather than in quantity. When you wrap OETH, you get back a fixed number of wOETH tokens. This number will not go up - you will have the same number of wOETH tokens tomorrow as you have today. However, the number of OETH tokens that you can unwrap to will go up over time, as wOETH earns yield at the same rate as standard OETH. The wOETH to OETH exchange rate can be read from the contract (0xDcEe70654261AF21C44c093C300eD3Bb97b78192, function number 16), or via the OETH dapp.

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.

Security Risk Mitigation

OETH has been operational for over 2 years with a TVL of 54,000+ ETH ($235m+), 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

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 and wOETH 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.