What are you voting for?

• Extending 100,000 XAI of Credit to the OHM silo

OHM Credit Line

Basics

Name: Olympus v2

Ticker: $OHM

Contract Address: 0x64aa3364f17a4d01c6f1751fd97c2bd3d7e7f1d5

Description: $OHM is a reserve currency that is backed by PoL in the form of bonded assets

Liquidation Threshold: 85%

Max Liquidation Fee: 15%

Absolute Parameters

Oracle: Chainlink OHMv2/ETH price feed

Liquidation: Silo’s liquidation engine can liquidate OHM collateral efficiently.

Protocol-Wide Parameters

As discussed in the original Risk Framework, no individual silo will receive a credit line extension exceeding 2,348,150 $XAI (1,643,705 $XAI after application of liquidity buffer).

Silo-Specific Parameters

$OHM has relatively shallow on-chain liquidity across Uniswap v3 and Balancer v2. Currently, liquidators are hard-coded to route through the OHM/ETH Balancer v2 only which has ~35m liquidity.

Simulating sales of our max credit line extension value implies a slippage of 11.4% which is within acceptable ranges given our max liquidation fee of 15% for $OHM.

As such, the binding constraint for a credit line to $USDT is our Protocol-wide Parameters (i.e. $XAI on-chain liquidity) rather than $OHM itself.

Recommendation

$OHM is a widely circulated reserve currency token with significant integrations across the DeFi landscape with a recent OlympusDAO proposal (https://forum.olympusdao.finance/d/1825-oip-127-ohm-lending-markets-pilot-programme) to bootstrap the OHM silo. In combination with a $XAI credit line, we believe that cross-collaboration between Olympus and Silo will allow for benefits to both protocols.

It should be noted that $OHM’s on-chain liquidity is relatively shallow especially given our liquidators are hard-coded to route via the Balancer v2 OHM/ETH pool only. As such, we recommend a limited credit line only to the amount of 100k $XAI, which will incur slippage of 0.2% which is within reasonable bounds for liquidator profitability.

We recommend continued assessment of on-chain liquidity of both $OHM and $XAI to ensure that it remains within a safe range that will allow liquidations to occur as normal.