This proposal aims to add gOHM as a collateral option on FiRM, setting collateral factor to 75% and an initial daily borrow limit of $250k.
Background:
On December 16th, 2022, Proposal #74 titled: “Launch FiRM - The Fixed Rate Money Market Protocol” passed through Inverse governance. Since launch, FiRM has been operating flawlessly in “guarded mode” with a single market of wrapped Ether and a limited amount of DOLA available to borrow. WETH was chosen for the debut market as it’s considered as pristine as a collateral can get on the Ethereum blockchain. A DOLA lending supply cap is continuously monitored by the RWG and any expansion or contraction will always be considered in relation to DOLA circulating supply and liquidity. At this time, we are comfortable with onboarding a small selection of new collateral options that have passed our due diligence process, continuing with gOHM.
Any decision regarding future expansions of the market will be actively managed by our Treasury and Risk Working groups. We are determined to stay true to our improved security posture and gradually add new markets to FiRM as usage grows and the DOLA ecosystem evolves. We have many exciting and innovative ideas to build on top of FiRM involving new markets, use cases for DBR, liquidation mechanisms, and more that will require extensive internal code review and external auditing.
Summary:
The due diligence conducted by Inverse Finance’s Risk Working Group on gOHM by Olympus DAO has determined that gOHM is a suitable collateral for the fixed-rate lending market, FiRM. The gOHM token has demonstrated a strong track record of stability and has the necessary infrastructure in place to support its use as collateral on the platform.
The Olympus DAO team has a clear understanding of the lending market and has implemented appropriate risk management measures to ensure the safety and security of user funds. This includes one of the largest active bug bounty programs currently available, $3.3M in available rewards on the ImmuneFi platform.
The Risk Working Group has evaluated gOHM’s technical and economic characteristics and has determined that it possesses the necessary attributes to be used as collateral on the FiRM platform. The token is liquid, is paired with other reliable tokens (wETH, USDC, AVAX, FTM, Temple) in deep LPs on different platforms (Uniswap, Sushi, Trader Joe, Spookyswap) and several chains (Ethereum, Arbitrum, Avalanche, Polygon, Fantom), thus addressing most SPOFs. gOHM also has an elegant oracle solution, making use of a Chainlink oracle for OHM and simple indexing.
Furthermore, the team behind Olympus DAO has shown a strong commitment to the development and growth of the project, which has been evident in their continued activity and building throughout the second half of 2022. The team is actively engaged with the community, and they regularly update and communicate their development progress and road-map.
Overall, the Risk Working Group is satisfied with its findings and a risk-assessment report summarizing this due diligence process can be found here. The RWG is confident in the ability of gOHM to serve as a reliable and stable collateral on the FiRM platform. Based on these findings, the Risk Working Group approves gOHM as collateral on FiRM with an initial Collateral Factor (CF) of 75%. The addition of gOHM as collateral on FiRM will provide Olympus users a much needed additional option to secure loans.
On-Chain Actions:
DBR:
- Call addMarket with the gOHM market address
Market:
- Call setBorrowController with the deployed borrowController
- Set collateralFactorBps of gOHM market to 7500 (75%)
FiRM FED
- Set marketCeiling to 1,000,000 DOLA for gOHM market
Oracle:
- Call setFeed with gOHM address, the OHM Chainlink feed, and the correct amount of decimals.