G(r)eeks, we’re so excited to be officially announcing our partnership with Origin Protocol for the launch of Archimedes, our blue chip lending and borrowing marketplace.
At Archimedes we’re building a baseline of high quality leverage, with the goal of helping the entire DeFi ecosystem scale and become more capital efficient.
With a real yield approach, and leverage that is fully backed by collateral, Archimedes is built to be a pillar of DeFi. Lenders can provide liquidity to our lvUSD / 3CRV Curve pool and enjoy a great risk-to-reward ratio from the Archimedes’ real yield approach.
Archimedes makes it so that borrowers can get access to up to 10x leverage on high quality appreciating stablecoin assets, and it’s all starting with Origin Protocol’s OUSD.
Why Origin Protocol?
Our goal with this and any other partnerships down-the-line, is to create relationships with thoroughly vetted, high quality protocols that enable greater long-term attractive returns for our users.
We’ve chosen our launch partner to be Origin Protocol with their automated yield farming token, OUSD, Origin Protocol’s USD pegged and yield-bearing stablecoin. OUSD is the only stablecoin that automatically earns yield while sitting in your wallet. No staking or locking tokens is required. OUSD is currently earning highly compelling and safe yields at 6–8% APY. OUSD has weathered through what is being called the toughest market since crypto’s inception and is overcollateralized. It has proven to have a strong peg mechanism, and to be battle tested in different market conditions. Bear or bull market: the Origin Protocol team has consistently delivered. For these reasons, we believe OUSD has proven to be a stable and sustainable project.
Additionally, Origin Protocol shares the same values we live by: they are a fully doxxed and transparent team, and take security and safety seriously as they’ve shown through their thorough and ongoing audits.
Matthew Liu, CEO @ Origin Protocol: “We’re thrilled that Archimedes is using OUSD as a money lego to enable industry-beating stablecoin yields using leverage. When Oz, Archimedes’ CEO, approached us with the idea of the Archimedes leverage engine, we were immediately excited to partner to create this new product offering to DeFi users. Archimedes’ unique leverage products provide users with different risk/return options that are backed by our battle-tested protocol. We’re excited to be the inaugural launch partner and are excited to bring the offering to our OUSD users, investors, and broader community.”
OUSD (Origin Dollar) is a new type of ERC-20 stablecoin, launched on the Ethereum blockchain in 2020. OUSD is 100% backed 1:1 by other stablecoins such as USDC and DAI.
To acquire OUSD, users can convert their existing stablecoins into OUSD at the official Origin Dollar DApp or via an AMM. OUSD held in a user’s wallet will then immediately begin to accrue compounding yield.
These yields are generated by the protocol lending out stablecoins that were initially deposited to the OUSD smart contract to other DeFi protocols, like Aave, Compound, and Curve. The OUSD smart contracts will maneuver stablecoin assets in-and-out of liquidity pools across AMMs seeking to provide the best possible yield for its holders. First, it efficiently rebalances assets to get optimal yield across a diverse set of strategies. It also auto harvests and auto compounds yield, while amortizing gas costs from its entire user base. This all results in higher risk-adjusted returns than competing strategies while maintaining a simple and intuitive user experience.
These metastrategies are constantly going through governance proposals and are voted and approved by their community on a weekly basis — all with the objective to maximize the yield for their users. Whenever any changes to the strategy requires significant smart contract code changes, the Origin Protocol OUSD team will first run those code updates and changes through audits by their auditor of choice to mitigate smart contract risks to their users.
Now that we understand what OUSD is and how the stablecoin accrues interest, let’s dive into how Archimedes can work with them.
How do Archimedes and OUSD work together?
Let’s say you hold OUSD and want to build a leveraged OUSD position. That’s where Archimedes comes in.
To start, you will need to visit ArchimedesFi.com and deposit your OUSD on our platform. Aside from depositing OUSD, to open a leveraged OUSD position, the borrower (or leverage taker), will also need to bid for leverage via our G(r)eek Auction with ARCH tokens, the Archimedes’ governance and utility token.
Archimedes then borrows enough lvUSD, our stablecoin, to give you a leveraged OUSD position. As an output, Archimedes provides up to 10x APY on your OUSD deposit, and sends you an NFT representing the position. You can choose to unwind the position at any time to collect both the principal deposit and any interest earned in OUSD.
As a simplistic example: Say OUSD offers 6% APY. With 10x Archimedes leverage, instead of 6%, the leverage taker would receive 60% APY on their OUSD deposit to Archimedes, gross of commissions and fees. Also, since the position is wrapped as an NFT it can easily be traded on NFT marketplaces — nice!
Archimedes’ leverage positions stay open for 12 months before the user is faced with 2 options. One, unwind the position, which burns the NFT and claims the principal as well as any interest earned, or two, use ARCH token to renew the position for another 12 months.
On the flip side of things, liquidity providers can also take advantage of the Archimedes’ leverage engine by being lenders.
Lenders provide lvUSD/3CRV to our Curve pool in return for sustainable top of market APY through our token dynamic emissions in ARCH, other partnered protocol tokens, and a share of the fees paid by lenders.
We believe that this partnership is only the beginning of a long-term, sustainable, value generating collaboration with Origin and other blue chip DeFi protocols.
Archimedes is an innovative and experimental project. We are working hard to bring in new opportunities to the DeFi community and beyond.
Stay tuned for more detailed information about Archimedes and our launch date here in our Medium!
If you also want to partner with us or be a genesis liquidity provider please reach out to firstname.lastname@example.org. We would love to hear your proposal.
Archimedes is an experimental protocol and carries significant risks: Smart contract risk, economic model risk, risk that the assets Archimedes introduces and many other types of known and unknown risks. Archimedes’ team never provides investment advice. This article is NOT financial advice. DYOR. Participate at your own risk.