In pursuit of preserving wealth amidst skyrocketing inflation, many investors have flocked to stablecoins to earn elevated yields offered by CeFi platforms. Unfortunately, user trust in several firms such as Celsius, Voyager, BlockFi, and FTX was misplaced. Billions of dollars in investor money was sorely mismanaged, leaving the users with frozen accounts and no liquidity.
Understanding that the opaque nature of these CeFi lending platforms allowed money managers to go unchecked, users sought the more transparent and sustainable alternative: DeFi. In return, this perceived safety of DeFi blue-chips led to returns being diluted to under 2%.
In order to attain higher DeFi yields, users had to either take elevated risks by using less established protocols or independently audit the applications they used. However, innovators in DeFi are finding new ways to maximize stablecoin yields. With Origin Dollar’s new Convex strategies, users are provided with a solution that enables them to achieve higher yields without compromising security.
This is in part due to active management across blue-chip DeFi protocols like Aave, Compound, and Curve, and in part due to the rebasing mechanics of Origin Dollar. Since OUSD only grows in user wallets, the stablecoins held in smart contracts forgo this yield. The yield earned by these smart contracts is then redistributed to users, boosting their yield.
DeFi Lending as an Alternative to Crypto Platforms
OUSD is a yield-bearing stablecoin, backed 1:1 by other stablecoins such as USDC, USDT, and DAI. It earns yield through market-neutral, blue-chip DeFi strategies. Since OUSD and its strategies have to be fully on-chain, the protocol is fully transparent and auditable by anyone. Being fully on-chain also means that the yield product is available to anyone with internet access.
Being that yield is generated on-chain, Origin Dollar is unable to engage in uncollateralized, high-risk strategies utilized by bankrupt firms like FTX, Voyager, and Celsius. This is not without drawbacks, as higher risk strategies usually yield higher APYs. However, OUSD’s security-first philosophy forces it to work within these confines, conscious of the fact that every dollar the code manages is a real person’s assets.
That said, OUSD has a team of in-house engineers that are able to analyze, develop, audit, and deploy strategies, pending a successful vote from Origin Dollar Governance (OGV) holders. By creating their proprietary Convex strategies, OUSD has managed to soften the tradeoff between DeFi yields and risk, expanded on below.
New Convex Strategies Boost Yield In DeFi
Convex uses Curve, a decentralized exchange, where users can earn fees and rewards by providing liquidity to traders. The 3Pool on Curve comprises USDC, USDT, and DAI, allowing liquidity providers to earn the fees from users trading between these tokens. Beyond accruing trading fees, OUSD’s initial integration utilizes this pool to earn token rewards from Convex and Curve.
OUSD’s first new strategy is called the Convex Generalized Meta Strategy, allowing OUSD to utilize pools that pair 3CRV with other stablecoins, such as OUSD. Providing liquidity between 3CRV and OUSD allows users to trade between OUSD, USDC, USDT, and DAI. This position is then deposited into Convex, earning CRV and CVX staking rewards, on top of the pool trading fees. Other stablecoins can also be integrated via this strategy, such as LUSD and alUSD. After passing multiple audits, Origin Dollar recently onboarded the LUSD Convex strategy to its yield-bearing functions.
Full Liquidity While Earning Rewards
OUSD distributes yield to holders by increasing the balance in users’ wallets daily as rewards are earned in staking pools. This process is also known as rebasing, allowing users to save on transaction fees that would have been otherwise spent on staking and redeeming rewards. The absence of lock ups also enables users to remain fully liquid, unlike many platforms or banks which require fixed-term deposits.
Note that OUSD held in smart contracts is non-rebasing by default, (also applying to protocols such as Curve and Convex). This indicates that while OUSD is utilized for providing liquidity and earning yield on certain smart contracts, it does not receive the daily OUSD interest distributions. The yield is instead distributed pro-rata among regular users who hold OUSD in their wallets, allowing them to achieve yields far greater than using the underlying protocols directly.
Higher APY, Same Security
OUSD maintains its philosophy of security first, prioritizing the safety of users’ funds above all else. During a period of an ongoing bear market, OUSD suffered from compressed yield opportunities in DeFi but remained true to its philosophy. As a result, Origin Dollar remained wholly unscathed while other CeFi platforms suffered from insolvencies and bankruptcies due to their negligent practices.
Through the deployment of its new proprietary strategies, OUSD has elevated yields while maintaining the same security that guided it through 2022’s turbulent period. Other new strategies continue to be built and can be monitored on the Origin Dollar governance page.
OUSD helps users safely and easily earn passive income on their stablecoins. If you do not already hold OUSD, you can acquire it through decentralized exchanges like Curve and Uniswap, centralized exchanges such as Kucoin or Gate, or on their in-house app on OUSD.com
