Origami Vault Tokens (ovTokens)

Origami v1 vaults such as ovGLP and ovGMX have been deprecated in v2 but current users can still withdraw

The user shall first deposit the appropriate underlying Token for the vault such as GMX or GLP. They will then receive an Origami Vault Share Token, or “ovToken”, which represents their share of the then-current outstanding oToken reserve in the vault.

As staking rewards are harvested and sold, more of the underlying Token will be acquired by Origami. This means an increase in the vault reserves. The reservePerShare rate is then updated, such that 1 ovToken is now worth more reserve tokens as a result of yield compounding activities.

"reservePerShare" is the ratio between the circulating supply of reserve oTokens and the circulating supply of user-owned ovTokens minted by Origami.

The higher the staking APY and the more frequent the compounding, the faster the reservePerShare will grow.

ovToken is a Repricing Token

The oToken vault reserve will grow faster than the number of outstanding vault shares due to yield compounding. This means the reservePerShare rate as denominated by the underlying Token will always rise.

Later as the user redeems their ovToken for the vault reserves, their vault share is now worth more oTokens than when they initially received the shares. Hence the user will receive more of the underlying Token upon ovToken redemption as the oToken is always backed 1:1 for the underlying.

The number of tokens the user can withdraw from the ovToken vault will not change as a result of other users entering or leaving the vault even if the % of the vault represented by the ovToken goes up or down. The oToken balance claimable by the ovToken holder will always reflect the original deposit plus any growth from auto-compounding yield from the external staking protocol that provided the yield. The infographic below depicts an example of this folding effect.

It is important to note that the price of the vault share in USD terms may go up or down depending on Token price action irrespective of Origami compounding or folding.

As shown in the above infographic, the USD price of 1 ovToken may rise or fall due to the price action of the underlying Token itself regardless of the growth of oToken reserves. Upward and downward price action for the underlying Token will be amplified in the same direction for the ovToken due to the nature of compounding yields into the same position.

At v1 launch, Origami will support GMX and GLP. Support for other tokens will be announced soon.