FIP-XX: Tribe Acquires OHM

Motivation and Summary

The Protocol currently has an obligation to acquire $10m OHM as Olympus has generated 50m Fei demand per FIP-79. Recently Olympus exchanged 50m DAI for 50m FEI via the DAI PSM which has helped tremendously to stabilize the FEI peg amidst recent market volatility.

This could be done using ETH, DAI, or LUSD. There is an argument to be made that using ETH would increase the protocol’s stable exposure and thus stable collateralization ratio. This is highly relevant to the discussions here.

Acquiring OHM

The protocol could sell ETH, DAI, or LUSD to make the $10m OHM acquisition.

Asset to Sell:

  • ETH
  • DAI
  • LUSD

0 voters

Accounting for OHM

OHM is backed by stables and has a risk free value (RFV). Olympus has been engaging in buybacks to keep OHM trading closer to its risk free value. There are also some risks to this RFV such as multisig risk and the risk of any yield bearing strategy the Olympus treasury may be deployed to. It is up for the community to decide if this acquired OHM and that which is currently in the PCV is to be accounted for as stable collateral to any extent.

The options on this poll are to determine if OHM should be treated as stable, not stable, or semistable. Semistable options are to increase the accounting of Fei’s stable backing as a percentage of OHM’s RFV.

  • Count RFV as stable
  • Count RFV as semi-stable
  • Do not count RFV as stable

0 voters


Voting will be solely around acquiring the OHM and which asset to sell. Any conclusions on how to account for the OHM will be done in a later post and discussions around this topic are only preliminary.

Strongly in favor of using DAI or LUSD to backup this purchase. As explained here, our ETH holdings are in a pretty safe state, and realistically OHM’s backing does not have a significant chance of disappearing. I’d like to get as much ETH exposure as possible in order to ensure the long term success of the treasury.

Generally in favor of at least maintaining the current stablecoin backing, so swapping ETH<->OHM.

Any ETH sale and the swap with OHM can be considered together so the final treasury balance has the right % stablecoin backing. If we do the swap with OHM in ETH, less need to sell ETH on open market.

1 Like

I agree with swapping ETH rather than DAI/LUSD for OHM. The PCV according to this screenshot is sitting at 30M DAI and 30M LUSD. Given this is a swap for 10M OHM, reducing the stable reserves will have a more impact to stability for PCV than swapping ETH at this moment. While OHM also has their RSV backing each asset, I still view this asset as a semi-stable asset rather than an actual stable asset given OHM did go below RSV ( I believe ) once beforehand.

Reducing ETH reserves from 300M → 289M is more favorable than decreasing FEI/LUSD from 30M → 20M

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During this particular time I would advocate of using ETH (also at a low) or majority ETH for the purchase. Stability of FEI should be prioritized here and safe stables to me have better value at this moment.

Acquiring with ETH would be a good move as eth could go down more if the market goes down.
Having more stables would also stabilize the protocol equity during downturns.