OUSD - Yield-Bearing, Well-Pegged, Scalable Cardano Stablecoin

[GENERAL] Name and surname of main applicant

Ethan Protas

[GENERAL] Are you delivering this project as an individual or as an entity (whether formally incorporated or not)

Entity (Incorporated)

[GENERAL] Requested funds in ada

300000

[GENERAL] Please specify how many months you expect your project to last (from 2-12 months)

5

[GENERAL] Please indicate if your proposal has been auto-translated into English from another language

No

[GENERAL] Summarize your solution to the problem (200-character limit including spaces)

OUSD is a scalable stablecoin solution that is easy to use, keeps a tight peg, and provides easy yields and economic incentives. It's a simple, high quality, & practically designed stable coin.

[GENERAL] Does your project have any dependencies on other organizations, technical or otherwise?

No

[GENERAL] If YES, please describe what the dependency is and why you believe it is essential for your project’s delivery. If NO, please write “No dependencies.”

No dependancies

[GENERAL] Will your project’s output/s be fully open source?

No

[GENERAL] Please provide here more information on the open source status of your project outputs

Two Year Business Source License Then Open Source. However, the OTOKEN Framework upon which it is based will be open source and teams can extend upon that themselves.

[SOLUTION] Please describe your proposed solution

OUSD is a fully collateralized algorithmic stablecoin backed by mixed collateral. By leveraging the OToken framework OUSD will enable the passive participation in yield accrual strategies across the ecosystem without requiring active management or participation.

[IMPACT] Please define the positive impact your project will have on the wider Cardano community

OUSD is the perfect product to onboard non DeFi native users into the ecosystem by offering a hands off approach to stablecoin capital management. In the current paradigm of stablecoins on Cardano, each user must actively manage their position on a continual basis by monitoring the yield on different platforms to ensure they remain in optimal strategies according to their specific risk profile. This requires a thorough understanding of yield farming mechanisms, impermanent loss, interest rate arbitrage, among other advanced concepts in DeFi. OUSD provides a solution layer that abstracts away the underlying mechanics of yield bearing dynamics into the simple “stake and forget” passive strategy most favored by long time ADA holders and now becoming available to stablecoin capital management.

[CAPABILITY & FEASIBILITY] What is your capability to deliver your project with high levels of trust and accountability? How do you intend to validate if your approach is feasible?

Optim Finance has notably achieved a substantial milestone with the successful launch of a functional dApp, achieving top 5 TVL on Cardano. We’ve safely handled nearly 150 million ADA on our dApp in the past year. Our inaugural product, Liquidity Bonds, an innovative addition to the DeFi landscape, distinguishes itself by its uniqueness within the crypto space. This accomplishment underscores the team's capacity for not only conceiving but also effectively implementing groundbreaking DeFi solutions.

The team's ability to introduce novel financial instruments showcases a forward-thinking approach that contributes to the diversification and enrichment of the broader DeFi ecosystem, transcending conventional paradigms.

Critical to Optim Finance's achievements is its strategic alignment with Cardano's unique capabilities. By leveraging the distinct features of the Cardano blockchain, the team has demonstrated not only the conceptualization of pioneering products but also the agile and cost-effective deployment of these solutions. Optim’s track record underscores the team's adeptness at leveraging Cardano's strengths and showcases the efficient delivery of DeFi solutions.

The team's proven ability to innovate, design, and swiftly deploy DeFi products meets the evolving needs of the decentralized finance landscape, solidifying their role as leaders in the ongoing narrative of DeFi innovation.

[PROJECT MILESTONES] What are the key milestones you need to achieve in order to complete your project successfully?

Third party financial engineering consultant review.

This serves to validate the underlying system logic, risk assessments, and yield strategies utilized in the system by consulting with fellow industry leaders in capital management, real world assets, and robust protocol design.

Output: Report will be made publicly available to the community in order to foster transparency and confidence with future users.

OUSD system specification final revisions.

Optim Labs team will be taking the recommendations from the assessment in the previous milestone in consideration and making final adjustments to the overall system architecture, collateral risk profiles and planned algorithmic market operations.

Output: A report of implemented updates will be made accessible to the community to educate users in the ongoing and real time development of this product.

User Interface and User Experience development.

Figma mockups of the application will be sketched and iterated upon with the help and feedback from core Optim DAO contributors, as they have very successfully helped in this regard with our previous products. Once completed, these Figma mocks of the application will be used to create accessible and user friendly tutorial articles to start educating users on how to utilize and interact with the OUSD system.

Output: Link to Figma mockups

OUSD system code completion. 

After full development of both the smart contracts and the off-chain logic the finalized repository of the completed application will be frozen from further changes.

Output: A video walk through of CLI interaction with the smart contracts will be provided as proof of this milestone completion.

OUSD security audit.

Optim Labs will continue its commitment to safety and security by procuring thorough auditing services to evaluate the integrity of the OUSD core components from a reputable firm in the ecosystem. 

Output: A letter of intent from the chosen security firm partner outlining the scope and expected timeline of the full audit will be provided and an announcement will be made on our public community channels.

OUSD Testnet

Testnet deployment will be launched to stress test the system’s requirements and ensure the product’s integrity in a real environment.

Output: Documentation on testnet participation guides.

[RESOURCES] Who is in the project team and what are their roles?

Ethan Protas- Product lead

Maksymilian Brodowicz/ Zygomeb - Tech lead

Experience - Minswap, MLabs, IOHK

Consistently delivered/shipped high quality DeFi protocols to mainnet

Clear track record of successfully delivering dApps that are widely adopted

Website: https://www.optim.finance/ 

[BUDGET & COSTS] Please provide a cost breakdown of the proposed work and resources

Design & Documentation: 75K

Education & Marketing: 25K

Software engineering: 200K

[VALUE FOR MONEY] How does the cost of the project represent value for money for the Cardano ecosystem?

The OUSD capital management system provides considerable value to the Cardano ecosystem by lowering the barriers to entry for retail users with little or no DeFi experience to start engaging, utilizing and deploying their non-volatile assets on chain. A major unanticipated factor slowing growth within Cardano is that unlike more mature ecosystems that have had years long exposure to decentralized finance applications with much higher risk tolerance for exploring and experimenting on chain, the core demographic in Cardano has had minimal exposure to DeFi in general and is very risk averse of utilizing the chain as a result.

OUSD will be the perfect onboarding ramp into Cardano’s DeFi ecosystem by abstracting away layers of complexity into a simple product that behaves similarly to ADA, a product they are intimately familiar with, and can be used as a means of exchange or staked to gain native yield exposure. Optim’s vision for the ecosystem is that by reducing the barriers to entry and providing an accessible way to start interacting with DeFi products, the demographic of new users will consistently gain confidence in their ability to interact with blockchain applications and eventually venture forth on their own and expand their utilization of DeFi applications organically. This will explode adoption and spur a never before seen DeFi 2.0 phase within the Cardano ecosystem and bring us closer to parity with other L1 chains.