OADA - TVL, Volume, and Network Sustainability via DeFi Yield

[GENERAL] Name and surname of main applicant

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

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

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

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

OADA and sOADA blend yield aggregation and Liquid Staking Derivatives, enhancing Cardano with simple, passive ADA yields to boost DeFi adoption and ensure network resilience.

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

[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?

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

Direct OADA code will have a business source license. Yield modules not part of core system will not be open source but are outside the scope of this proposal.

[SOLUTION] Please describe your proposed solution

The OADA model separates concerns between two different synthetics, each serving a different purpose and working in unison to facilitate enhanced yield and governance. As native staking yields fall, the DeFi ecosystem rises, and Cardano governance advances, the opportunity arises to create more dynamic, versatile, and potent forms of ADA.

The system is composed of trading and staking exposed synthetics. OADA is the ADA stablecoin. Cheaper than ADA, but pegged to ADA. sOADA is a yield bearing token. Higher yielding than ADA, but always redeemable for ADA.

OADA is stripped of staking yield and can be thought of as the trading vehicle of the system. It is nimble and provides a variety of composability and usability advantages when integrated in DeFi protocols. sOADA is the staked version that provides enhanced yield over the base staking rate through natural system leverage and algorithmic market operations (AMOs).

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

OADA will provide a less cumbersome and more composable form of ADA for Cardano dApps to build with which will result in more advanced DeFi across the ecosystem.

sOADA will provide a safe, yield boosted alternative to ADA that is always backed 1:1. 

As staking yield falls below 3% it is likely that many ADA holders sitting on the sidelines 

passively staking will be looking for straightforward yield while retaining governance right

A system like OADA serves as a form of Liquid Staking or improved staking at the point

that native staking yield is unappealing in the 1-2.5% range which is fast approaching.

Bringing tons of ADA into DeFi in this way has the potential to boost TVL in the

Ecosystem significantly. This will benefit all projects as new participants and liquidity eventually explore the ecosystem further. 

[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?

Research & Development: ADA Lend AMO

Financial modeling and software engineering necessary to create an OADA AMO to leverage the Liqwid lending market for additional yield opportunities.

Output: ADA Lend AMO design specification, publicly available.

ADA Lend AMO Testnet

Optim labs will stress test and collect performance data on new AMO and make any adjustments to the architecture if necessary.

Output: Documentation on testnet participation guides.

ADA Lend AMO Mainnet

The new Liqwid lending market AMO will be deployed on mainnet and integrated to the already live OADA Capital Management system to complete the life cycle of development.

Output: in production mainnet deployment transaction

Research & Development: OADA Lend AMO

Financial modeling and software development necessary for an OADA Lend AMO module. This is inherently different from the ADA Lend AMO as it enables the minting of OADA using the overcollateralization of volatile assets to increase the supply when demand is high and furthering its monetary premium as a trading vehicle across the ecosystem.

Output: OADA Lend AMO design specification, publicly available.

OADA Lend AMO Testnet

Optim labs will stress test and collect performance data on new AMO and make any adjustments to the architecture if necessary.

Output: Documentation on testnet participation guides.

OADA Lend AMO Mainnet

The new Liqwid lending market AMO will be deployed on mainnet and integrated to the already live OADA Capital Management system to complete the life cycle of development.

Output: in production mainnet deployment transaction

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

Ethan - Product lead

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: 400K

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

A system such as OADA has the potential to completely change Cardano DeFi in a number of meaningful ways. The value provided to the ecosystem is enormous. Cardano needs unique DeFi primitives that go beyond new and improved ways of swapping tokens.

Cardano needs increased liquidity and to put ADA to work in the DeFi ecosystem. Less than 2% of all ADA circulating now participates in DeFi on-chain. OADA shows great potential to change this.

Many ADA holders large and small want a safe place to enjoy passive yield. We've seen nearly 150 Million ADA enter Optim's Liquidity Bonds, only constrained by the number of borrowers.

With OADA and sODA having a larger yield capacity with fewer dependancies, it is feasible that we bring hundreds of millions of ADA off the sidelines to participate in Cardano DeFi.

The Optim team has shown its ability to design and ship new DeFi primitives that people actually use. This has been delivered in an efficient and cost effective manner. We will continue to provide value to the ecosystem. A few hundred thousand US dollars is a tremendous value, especially in light of the countless millions given to projects that have failed to find product market fit or release products that increase on-chain activity.