Olympus DAO

Summary: Seek authority from the community to whitelist Anchor Protocol for depositing of UST.

Background: Recently the DAO has been accumulating UST through bonds. The framework and guidance for treasury exposure to UST was outlined in OIP-52 - Add UST to the Treasury. The DAO is now seeking the ability to deposit idle UST in Anchor to further increase the backing of OHM and to support the Terra ecosystem.

Olympus will receive newly minted Anchor Terra (aTerra) in exchange for their deposit. aTerra tokens represent Olympus’ share in the stablecoin pool and can later be redeemed to claim the initial stablecoin deposit, along with accrued interest and subsidies, see: https://app.anchorprotocol.com.

Motivation: Whitelisting Anchor Protocol will allow Olympus to earn a fixed rate return on providing collateral to the UST Stablecoin Market.

Description from docs.anchorprotocol.com: Anchor is a decentralized savings protocol offering low-volatile yields on Terra stablecoin deposits. The Anchor rate is powered by a diversified stream of staking rewards from major proof-of-stake blockchains, and therefore can be expected to be much more stable than money market interest rates. The Anchor community believes that a stable, reliable source of yield in Anchor has the opportunity to become the reference interest rate in crypto.

Risks: UST is a non-native asset to ETH L1, the DAO will be providing collateral to a stablecoin market and Anchor holds the majority of UST supply however Olympus will only provide a small percentage in comparison to total excess reserves which coincides with low risk per the DAO risk analysis.

Protocol Analysis: Using a risk analysis framework developed by the DAO, the Policy and Partnerships teams have attempted to score various protocols based on some subjective and non-subjective data. Anchor scored a 3. This is due to inherent risks associated with the asset itself, UST, allocation of excess reserves and the functionality of the protocol. The subjective value was derived from a combination of quantitative and qualitative.

The following risk analysis shows the outcome of the Treasury Team’s holistic assessment of the proposed platform and intended strategies. Lastly, one final reminder that this score is an average that was derived from an generalized assessment of the platform which includes TVL, audits, protocol age/risk, targeted investment and strategy type.

Risk analysis: https://docs.google.com/spreadsheets/d/1wD8_5HwPhL0PYii2wMwOy_rQBZ_SlI5MQUzZIlhMnFw/edit#gid=0

Discussion and more context: https://forum.olympusdao.finance/d/1105-tap-7-anchor-protocol-whitelist