Stablecoin Overview: Origin Dollar (OUSD)

Elastic Supply

OUSD is basically a stablecoin that automatically rebalances in your wallet while passively generating a yield. By holding OUSD, owners will notice the wallet’s balance slowly increasing. When minting OUSD, users deposit other stablecoins, which are automatically deployed across the DeFi ecosystem. These strategies include lending assets on Compund and Aave or automated market making (AMM) on Curve. The generated returns are passed on to the holders of OUSD via constant rebasing of the money supply. The protocol continuously adjusts the token supply in response to the generated yield (the supply gets rebased several times per day). Rebasing will only increase supply since the amount of OUSD minted is tied to the realized gains earned by the underlying strategies. The value proposition of OUSD is ease of use. The only requirement to earn yield is just to buy OUSD and let it sit in a wallet. The protocol has a few caveats. Users can convert their OUSD back into other stablecoins at any time. However, the protocol charges a 0.25% exit fee and distributes the earnings to the remaining OUSD holders. The idea of the fee is to reward long-term holders and punish speculators. There is one question that comes up in the head of the average DeFi investor: Why not hold OUSD and also deploy my tokens on DeFi protocols for additional earnings? For example, providing liquidity on Uniswap. When locked in other smart contracts, the supply of OUSD does not change because many protocols are not designed with rebasing tokens in mind. For example, it will be very difficult to design a DAI alternative where the collateral of DAI rebases constantly. Smart contracts must explicitly opt-in to receiving yield via the rebasing mechanism.

OUSD vault strategy across protocols
Figure 1: OUSD yield strategies across protocols (source: https://analytics.ousd.com/)

Wrapped OSD (wOSD)

Wrapped OUSD provides a non-rebasing version of OUSD that still earns yield. wOSD addresses the problem of the rebase mechanism of OUSD and allows holders to deploy it across DeFi protocols such as Uniswap. Eliminating the rebasing mechanism also could provide tax benefits in some jurisdictions. The yield is earned when holders unwrap their wOSD back into OUSD. wOUSD is one of the first implementations of EIP-4626: Tokenized Vault Standard. The standard lowers the integration effort for yield-bearing vaults.

Governance

Origin Dollar is part of the Origin Protocol and is one of the many projects managed by the team. All projects are governed by the OGN governance token. Anyone with at least 1,000 OGN in their wallet can create a new proposal. Users can lock their OGN tokens to earn additional OGN after a certain time elapse. For example, a 90-day staking period would earn 12.5% annualized interest. This, of course, introduces the problem of inflation for the OGN token because the total supply increases after each staking period.

Example governance proposal on origin protocol
Figure 2: Governance proposal on reducing OUSD’ exposure to USDT (source:https://vote.originprotocol.com)

The classification of OUSD according to the ITC:

ITC classification of OUSD by ITSA
Figure 3: The OUSD Tokenbase entry (Source: https://itin.itsa.global/VN06NVF43)

The International Token Standardization Association (ITSA) e.V.

The International Token Standardization Association (ITSA) e.V. is a not-for-profit association of German law that aims at promoting the development and implementation of comprehensive market standards for the identification, classification, and analysis of DLT- and blockchain-based cryptographic tokens. As an independent industry membership body, ITSA unites over 100 international associated founding members from various interest groups. In order to increase transparency and safety on global token markets, ITSA currently develops and implements the International Token Identification Number (ITIN) as a market standard for the identification of cryptographic tokens, the International Token Classification (ITC) as a standard framework for the classification of cryptographic tokens according to their inherent characteristics. ITSA then adds the identified and classified token to the world’s largest register for tokens in our Tokenbase.

  • The International Token Identification Number (ITIN) is a 9-digit alphanumeric technical identifier for both fungible and non-fungible DLT-based tokens. Thanks to its underlying Uniform Token Locator (UTL), ITIN presents a unique and fork-resilient identification of tokens. The ITIN also allows for the connecting and matching of other media and data to the token, such as legal contracts or price data, and increases safety and operational transparency when handling these tokens.
  • The International Token Classification (ITC) is a multi-dimensional, expandable framework for the classification of tokens. Current dimensions include technological, economic, legal, and regulatory dimensions with multiple sub-dimensions. By mid-2021, there will be at least two new dimensions added, including a tax dimension. So far, our classification framework has been applied to 99% of the token market according to the market capitalization of classified tokens.
  • ITSA’s Tokenbase currently holds data on over 4000 tokens. Tokenbase is a holistic database for the analysis of tokens and combines our identification and classification data with market and blockchain data from external providers. Third-party data of several partners is already integrated, and API access is also in development.

Remarks

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OUSD stablecoin overview cover image by ITSA

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International Token Standardization Association

International Token Standardization Association

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The International Token Standardization Association (ITSA) is a not for profit organization working on holistic market standards for the global token economy.