Vault Synopsis
The hOHM Vault tokenises leveraged OHM generated against perpetually maximised Cooler debt.
OHM Looping Powered by Lov
hOHM delivers a new DeFi primitive for a liquid, maximally leveraged OHM token by taking advantage of new features introduced in the new Cooler V2 from OlympusDAO and building atop the robust foundation of Origami's battle-tested automation backend for looping money market applications. hOHM also drew inspiration from TempleDAO Protocol's battle-tested lending smart contract,
Welcome hOHM
Olympus' Cooler Loans V2--also known as MonoCooler--unveiled key improvements over Cooler V1. Specifically for hOHM, the two most important additions for Cooler v2 are:
Single, consolidated USDS loan position for each user instead of multiple positions.
Origination Loan-to-Value (OLTV) increases automatically to a fixed target over time.
Through governance, OlympusDAO will approve a sensible OLTV target to be reached by a certain date and the current OLTV will rise linearly until the target OLTV is reached. This new OLTV drip mechanic is derived from TempleDAO's Treasury Price Index. Users who want to maximise their exposure to OHM premium by taking out a USDS loan up to the maximum OLTV would have to do so continually and manually manage their debt position. hOHM steps into the void to meet this need.
hOHM introduces a tokenised Balance Sheet framework that maintains reserve assets and liabilities without relying on any external oracle pricing. The vault share price is seeded upon initialisation and dynamically tracks both gOHM/hOHM (collateral balance) and USDS/hOHM (debt). The unique oracle-free feature of hOHM allows scaling beyond traditional liquidity pool and price impact constraints.
mint ()
gOHM
USDS, hOHM
redeem ()
USDS, hOHM
gOHM
hOHM cannot be minted out of thin air by elevated access. Each hOHM in circulation was minted by providing the vault reserve gOHM and incurring the reserve USDS debt on a per share basis.
The hOHM vault will always max out the OLTV and maintain a nominal amount of surplus USDS. Idle USDS is deposited into the Origami sUSDS+s Vault to earn yield on idle funds at a risk-free rate. When below the threshold, the USDS buffer would support interest repayments under zero OLTV growth scenarios. Once the USDS buffer is above a policy threshold, funds will be deployed towardssweeps() i.e. repurchase of hOHM from a sUSDS/hOHM Uni V3 pool. Up to 3.3% of the repurchased hOHM will be sent to Origami as a performance fee, while the remaining 96.7% of hOHM will be burned to increase gOHM backing (and USDS debt) per hOHM.
While there is no mint fee for hOHM, users who wish to exit the vault will incur a 1%exitFee (updatable) to withdraw their gOHM collateral on top of repaying the then-current USDS debt. This fee is also referred to as a Retention Bonus as the retained hOHM is removed from circulating supply for the benefit of existing hOHM holders i.e. reserve backing will rise for remaining hOhmies.
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