One article to understand the context of the Ethereum income index product OETH

When you invest/speculate, will you give priority to whether the project is a long-term project or a short-term project?

Written by: Sleeping in the Rain

When you invest/speculate, will you give priority to whether the project is a long-term project or a short-term project?

Here I only talk about the LSDFi sector - most LSDFi projects are just short-lived, using high token rewards to attract TVL, and then delaying the release of tokens through some locking methods. I prefer those projects that have made some innovations, such as Pendle's interest rate-related extensions-of course, Pendle's these are not only applicable to Ethereum staking. In addition, ushETH and Lybra have also made some innovations. ushETH is committed to promoting the decentralization of pledges. My personal expectation for it is to play a role when the LSD track gradually matures and maintains a fierce competition. However, Lybra's interest-bearing stable currency seems to be more suitable for holding, and the source of interest is also safer. My personal expectation for it is more adoption after the scale is expanded, and the adoption of multi-chains.

One of the protocols I want to talk about today is OETH of Origin Protocol, whose TVL has risen well recently.

The collateral of OETH is the stETH protocol Ethereum pledge liquidity derivatives, 1 OETH=1 ETH. In short, the income source of OETH is ETH pledge interest + DeFi strategy profit and other Token rewards (Compound, Aave, Curve, Convex and Morpho). Then OETH is automatically compounded in our wallet.

Another mechanism of OETH is wOETH, the Wrap version of OETH. The balance of wOETH will not change, and it is used to satisfy some DeFi protocols that are not suitable for automatic compounding of OETH. When wOETH is exchanged for OETH, you can get the balance growth of OETH over time. That is to say, if you exchange 1 OETH for 1 wOETH, and then you use wOETH to do other things, after you finish, you can use 1 wOETH to exchange back to 1.x OETH, and x depends on the rate of return of OETH.

Next, I would like to talk about the problems that OETH wants to solve.

Doc said that OETH hopes to provide users with an opportunity to gain exposure to numerous LSD protocols (stETH, rETH, sfrxETH), and also provide higher profits. The ultimate goal is to solve the problem of single point of failure in Ethereum staking (Lido accounts for too much of Ethereum staking), but I think it is just an index product and cannot solve this problem. It is not as reliable as ushETH. However, its revenue optimization model is indeed not bad. It is similar to the index product provided by the Index Coop protocol I mentioned in the previous Sub: icETH.

For me personally, OETH is a long-term product, and it is not a big problem to participate in OETH, but the tokenomics of Origin Protocol still has room for improvement. In the initial stage, they used token inflation to reward veOGV stakers. The power of veOGV stakers is to participate in Origin's DAO governance, which will later be converted into a real income agreement.