Olympus DAO

Summary: Execute a token swap of OHM and TOKE with Tokemak to activate an OHM reactor leading into their C.O.R.E event, which will run for one week- starting 28th September. This proposal will only go into effect if Olympus is among the Top-5 protocols that receive the most votes at the end of the event. This OHM reactor and swap will help establish ties between both protocols and allow both parties to explore more ways of combining our unique infrastructures, diversify treasuries, and provide governance power within each other’s protocols.

Background: Olympus has over 170M USD in POL as of writing, with over 150M million USD in the OHM-DAI pool alone. The protocol currently owns ~ 99.9% of this liquidity and therefore routes that liquidity. Our policy team predominately handles this process by executing these internal decisions voted upon by our community per the Policy Framework, as outlined in OIP-22.

Tokemak currently has ~ 400M USD in TVL across their Genesis pools, with their PCA reserve also holding a combined 30M USD in both ETH and USDC. Each reactor serves as an isolated pair of assets with the option for single-sided liquidity provision on both sides of the pair. When providing liquidity on either side of a reactor, protocols, and users will receive weekly TOKE emissions. In the event of IL, Tokemak would draw liquidity from its PCA reserve to rebalance the specific reactor that has suffered the loss to make LPs whole again.

Abstract: Olympus has pioneered the concept of POL via Bonds, and Tokemak is attempting to solve for market-making within Defi through its novel liquidity routing infrastructure. Olympus views Tokemak as an essential infrastructure piece to; democratize liquidity provision, strengthen OHM liquidity pairs across different exchanges, accumulate TOKE to supplement OHM bond emissions. This swap allows Tokemak to use the OHM as an operational reserve to spin up an OHM reactor, and in return, Olympus will receive a USD equivalent worth of TOKE to become a powerful liquidity director. The 3M USD of OHM as a reserve would be paired with 3M USD of ETH in order to source an initial 18M USD worth of liquidity (9M USD of OHM + equivalent 9M USD of ETH) for the OHM reactor. The OHM used for the swap will come out of the DAO holdings (1.3% of our total OHM holdings).

**Motivation: **Establish a bond between both protocols in order to explore more ways Olympus and Tokemak can better leverage their unique infrastructures.

Intended Utilisation: Olympus will use the TOKE from the swap to direct OHM liquidity in the tOHM reactor. The additional TOKE earned whilst directing liquidity in the OHM reactor will function as a policy, treasury, and partnerships lever to potentially reduce bond emissions and reduce slippage across OHM pairs.