Introducing Archimedes
The father of leverage is coming to your stablecoin farms, G(r)eeks rejoice.
TLDR at the bottom.
Unlocking idle liquidity
Liquidity is the oxygen of every financial system, without it, markets parish. In DeFi, almost all liquidity is ‘locked’ (TVL is the KPI for a reason), meaning it can no longer be used, but certainly the protocols are using it, right? Well, actually the answer is no.
Over 95% of the yield on Curve does not come from transaction volume. That means 95% of the value being generated is not due to capital being utilized, yet still liquidity providers are being rewarded handsomely for their money essentially sitting there. This is the definition of idle liquidity, and we created Archimedes to help unlock this idle capital.
How might you ask?
Leveraging the power of the “Meta-Vault”
APYs fluctuate in between projects and pools almost hourly, and this is the nature of the game for a humble farmer, with pool hopping the norm and gas fees the price you pay to play. As network fees continue to increase, the game has become dominated by whales and left the little farmer guy or gal on the sidelines or worse, rekt.
From this a new set of protocols has emerged, which provides the consistent APYs of a pool hopper without the enormous costs of going it alone: the Meta-Vaults.
But ser, what’s a Meta-Vault?
A meta-vault is an actively managed pool of funds that takes care of all of the expensive pool hopping, harvesting, and compounding for a modest fee. By combining the capital of an army of Degens, they have merged to create the Megazords of yield farming. For example, OUSD by Origin protocol invests in multiple strategies with a single deposit, and takes care of everything automatically with no gas fees.
Meta-vault as the ideal collateral asset
While some other leverage protocols have focused on helping unlock one pool of capital at a time, this still doesn’t solve the core issue: most often these positions start out with a high APY, but then dry up over time, leaving you doubly locked in (or even worse, earning negative yield). This is why we’ve decided to make appreciating meta-vaults the only type of assets Archimedes supports, starting with OUSD, from Origin Protocol, with others soon after.
Why OUSD? Well, first we’re big fans of OUSD and the Origin team (you can learn more about them at ousd.com). More importantly, OUSD is the ideal meta-vault asset: positive rebasing automatically in your wallet, battle tested contracts with over 300M in TVL, and backed by high quality strategies with sound governance.
How it works: The Archimedes Leverage Engine
Investors deposit USDC/USDT/DAI with the Leverage Engine
- The Leverage Engine deposits USDC/USDT/DAI into Origin protocol and receives OUSD
- OUSD is used as collateral to back minting of lvUSD, with a collateralization rate of 95%
- With Archimedes’ Curve pool, lvUSD is swapped for USDC/USDT/DAI
- Back to #1
- Profit
The Leverage Engine determines available lvUSD based on liquidity depth in Archimedes’ 3CRV+lvUSD Curve pool.
The end result: Supercharged APYs
The team here is a bunch of Geeks (not to be confused with Greeks like Archimedes), so let’s do some math: assuming OUSD’s yield is around 30% APY, with enough liquidity, an investor can access up to 5x leverage on their initial deposit. That brings us to 5 x 30% =150% APY on your stablecoins, and did we mention there is no liquidation risk?
No liquidation risk
Because every lvUSD is backed by an appreciating, battle tested, ‘like-kind’ USD-pegged asset, liquidation should be a thing of the past — borrow up to 95% and watch your position grow with peace of mind.
So what‘s next?
We are preparing for launch in a few months, and leverage will be capped as we grow the protocol. While other protocols cater to whales, we want to make sure our early community can be a part of our growth from day 1. Therefore, starting today, we will be running a whitelisting campaign for early access to leverage.
How to get whitelisted
Join our discord, follow us on Twitter, and hang out, ask questions, and make friends. We’ll be giving out whitelist spots over the next month based on engagement (there may even be an NFT in your future).
TLDR; Leverage on OUSD (and others) is coming, join our discord since access for community members will be provided via whitelist campaign.
