Numerous financial strategy based and smart contract managed pools allow users to optimize their yield potential from whitelisted Cardano defi protocols.
Users of the Optim protocol deposit their assets into pools called vaults. These pools of funds are invested by smart contracts that are coded with one or more investment strategies and designed to allocate and reallocate funds to maximize the assets yield potential. Each vault deals with a different element of yield generating Cardano DeFi.
Finance strategists, purportedly community members, develop the strategies which the vaults work on. Then, pultus developers take these strategies and code them into smart contracts. The idea is that, in the future, this whole process will be decentralized through the community governance of the platform, a DAO. Financial strategists who’s proposals are successfully enacted will be entitled to a portion of the vault fees associated with their strategy.
The strategy smart contracts for each vault are publicly available for viewing on blockchain explorers
Vault Mechanics and Types
Each vault has at least one strategy associated with it, with most having more than one. The reweighing of asset deployment by the vault’s smart contracts will be computed off-chain and informed by oracles.
Upon depositing assets, users are given oVault tokens which represent their contribution to that particular vault and any yields earned. Each specific token deposited has its own representing token i.e. ADA deposited in a vault is represented by a token called oVada. These tokens are returned and burned when users withdraw their funds. These tokens, being Cardano native tokens, are tradable on the open market.
Single Asset Vaults: These deploy funds to multiple pools and yield farms across the ecosystem and only contain on type of asset e.g. ADA.
DEX LP Vaults: Funds are used to create liquidity positions on DEXs to maximize yields. Users can set parameters for their assets to avoid impermanent loss, and can choose between two auto-compounding and governance token withdrawal ratios, 50/50 and 75/25.
LenderOps: Funds deposited here are used on whitelisted lending protocols, optimizing yields in the form of interest paid to the user.
KeeperOps: Uses funds to take advantage of arbitrage and similar opportunities, such as borrower liquidation, across Cardano’s defi ecosystem. When opportunities are low idle assets are staked or lent out on whitelisted lending protocols to accrue interest.
StakerOps: Users can set parameters for their deposited ADA, and funds are then managed to optimize staking yields within the user’s set parameters. Users can diversify their stake into other tokens and even enter yield farming opportunities. The fees for using StakeOps are half of the normal vault fees.
Funds are immediately redeemable at any time if they are not in time-locked vaults. Time-locked vaults are aimed at longer term investors, 6 months, a year or longer, and services fees will be lower for time-locked vaults.
These are the preliminary fees posted in Optim’s whitepaper V1, and are subject to change before protocol launch.
- Deposit Fee: 0.05%
- Withdrawal Fee: 0.2%
- Performance Fee (unlocked vaults): 5%
- Performance Fee (time-locked vaults): 3%
- Mangement Fee: 1.5%
Bots will manage the elements of the vaults that aren’t programed into the smart contracts, such as: selling reward tokens, reinvesting rewards, managing collateral, and other vault housekeeping tasks. The management of these bots will be open sourced to community members. In exchange for managing these bots the bot manager will receive the platforms utility token, OTM.
Each vault has two individuals designated to be its overseers who have the authority to make adjustments: a custodian and a strategist. The strategist is the one who created the vault, and the custodian is community selected. They share maintenance privileges, reviewing and conducting the changes recommended by the vault’s bot “housekeeper”. A multisig wallet is used to execute changes to the script that manages the vault's funds.
All contracts deployed for yield strategies will go through an “extensive audit and review process”. Which goes as follows:
A contract is analyzed by internal smart contract engineers and security experts. Neither of whom contributed to coding said contract.
The contract is then reviewed by the audit team at mLabs.
The contract is then forwarded to unaffiliated third party auditors for review.
Optim is in talks with two audit firms to have them on a retainer. Meaning that future smart contracts can be audited quickly and their implementation can be completed in a timely manner.
OTM: A Utility Token
OTM is the platform’s governance token that is distributed to users of the protocol. Users will receive OTM tokens for:
- Creating and using Optim’s vaults
- Being bot operators and vault keepers
- Participating in staking and governance
Users can stake OTM tokens to vote and simultaneously accumulate more OTM tokens by doing so. Tokens that are staked for longer have a higher weight when it comes to voting. Users who have more OTM tokens will also have a higher voting weight.
A proposal will need to achieve the support of 4% of all the issued OTM tokens to be eligible to be debated by the community. To be approved for adoption on the platform the proposal only needs to get enough “for” votes to outweigh the votes “against” it.
After full decentralization has occurred, i.e. full control of the platform has been handed over to a DAO managed by OTM holders, these holders will also be able to vote to change the dynamics of the protocol’s treasury. These OTM holders will vote to create oTeams, much like a democratic society votes in members of government.
These oTeams will conduct changes and improvements that fulfill the outcome of votes. There are multiple proposed oTeams, each independent and dealing with a different part of the protocol.
Unlike many other projects Optim have gone out of their way to plan an in-depth DAO structure. Helping to stabilize the democratization of improvements to the platform and ensure that the security of the platform is difficult to compromise.
Concurrency is an issue each and every Cardano defi platform, or any platform that has a busy smart contract, will have to deal with.
Optim’s concurrency solution is yet to be detailed but their whitepaper teases a batching solution that will effectively manage moments when users try and withdraw from a vault simultaneously.
Oracles will either come from Chainlink or be built by the Optim team.