Convertible Deposits

1. Introduction

What are Convertible Deposits?

Convertible Deposits (CDs) are a financial instrument that enables users to deposit stablecoins into the Olympus protocol with three flexible exit options. When making a convertible deposit, users place a structured bet on the future price of OHM while helping the protocol diversify its treasury holdings.

Users deposit stablecoins (such as USDS) and receive receipt tokens plus a non-fungible position that locks in a specific conversion price for OHM. Before the deposit expires, users can choose to convert their deposit to OHM at the locked-in price, wait for full redemption of their original deposit, or exit early with a discount applied.

This creates "no-risk speculation on the future price of OHM" - if OHM's market price rises above the conversion price, users profit by converting. If not, users receive their original deposit back, subject to the discount if they choose early exit.

Benefits for Users

Convertible Deposits offer several advantages:

• Flexible Exit Options: Users are not locked into a single outcome. They can convert to OHM if profitable, wait for full redemption for certainty, or exit early if liquidity is needed.

• Risk-Limited OHM Exposure: Users can speculate on OHM's price appreciation without the full downside risk of holding OHM directly. Maximum loss is limited to the discount applied for early exit rather than OHM's price volatility.

• Liquidity Options: Receipt tokens are fungible and tradable, and users can borrow against active redemptions if needed while maintaining their position.

Benefits for the Protocol

Convertible Deposits serve strategic purposes for Olympus:

• Treasury Diversification: The protocol receives stablecoins that diversify its treasury beyond OHM-denominated assets, reducing overall risk.

• Increased Protocol Income: The protocol earns yield on deposited assets and benefits from reclaim discounts, creating additional revenue streams.

• Demand-Responsive OHM Emissions: The auction mechanism enables the protocol to emit OHM at market-driven prices rather than fixed rates, ensuring fair value exchange.

• Capital Efficiency: The system allows the protocol to access capital for yield generation while providing users with structured exposure to OHM.

2. How Convertible Deposits Work

The Auction and Bidding Process

Convertible Deposits operate through a continuous auction system where users bid by depositing stablecoins. Unlike traditional auctions with fixed end times, this auction runs continuously with dynamic pricing.

How Bidding Works

1. Users choose their deposit amount and period
2. The system calculates the conversion price based on current auction conditions
3. Users deposit their stablecoins and receive receipt tokens plus a position record
4. The conversion price is locked in for the duration of the deposit

Price Discovery

The conversion price is determined by supply and demand:

• High demand → Higher conversion prices (less favorable for depositors)
• Low demand → Lower conversion prices (more favorable for depositors)
• The system maintains a minimum conversion price floor

Exit Options

After making a deposit, users have three ways to exit:

1. Convert to OHM

Convert the deposit to OHM at any point before the position's expiry date at the conversion price locked in when the deposit was made. This is profitable when OHM's market price exceeds the conversion price.

2. Full Redemption

Wait for the deposit period to complete, then redeem receipt tokens for the full amount of the original deposit. This guarantees users receive exactly what they deposited, regardless of OHM's price movement.

3. Early Reclaim

Exit the position at any time by reclaiming the deposit with a discount applied. The protocol retains the discount as a fee.

Key Components

Receipt Tokens

Receipt tokens are fungible tokens that represent deposits in a 1:1 ratio. They are created when users make deposits and are named with the facility prefix plus the asset and deposit period.

Examples

• cdfUSDS-1m for 1-month USDS deposits through the convertible deposit facility
• cdfUSDS-3m for 3-month USDS deposits through the convertible deposit facility

Key Properties

• Fungible: All cdfUSDS-3m tokens are identical and interchangeable
• Tradable: Users can transfer or trade these tokens independently of their position
• Redeemable: Use them for full redemption after the deposit period

CD Positions

A convertible deposit position is a non-fungible record that contains the specific terms of the deposit:

• Deposit amount and asset
• Conversion price for OHM
• Expiry date
• Deposit period

Position Properties

• Unique Terms: Each position has its own conversion price based on when the deposit was made
• Optional NFT Wrapping: Positions can be wrapped into ERC721 NFTs for easier management and trading
• Required for Conversion: Users need their position to convert to OHM, but not for redemption

DepositManager

The DepositManager is the secure custody system that holds all deposited funds. This is a critical security feature with flexible yield strategies:

Security Guarantees

• Isolated Custody: Deposited funds are separated from the protocol treasury
• No Governance Access: No other contract in the protocol—including governance—can access funds deposited on behalf of users
• Contract-Specific Access: Only the specific facility contract that accepted the deposit can access those funds

Yield Strategy Options

• At Rest: Each configured ERC20 token can be held directly in the DepositManager
• Vault Strategy: Tokens can be deposited into a configured ERC4626 vault to earn yield
  • Once an ERC4626 vault is set for a token, it cannot be changed - this prevents governance attacks that could redirect funds to a malicious vault
  • The ERC4626 vault should also be designed to only increase in value ("monotonically increasing"). The DepositManager does not currently handle reductions in the value of vault shares.

What It Does

• Issues and manages receipt tokens
• Holds deposited assets securely (either directly or in configured vaults)
• Facilitates withdrawals when authorized
• Manages yield generation on deposits

Deposit Periods

Convertible deposits are available in multiple time periods (subject to protocol configuration):

• 1 Month: Shorter commitment, faster access to full redemption
• 2 Months: Medium-term option balancing flexibility and potential returns
• 3 Months: Longer commitment, potentially better conversion opportunities

The deposit period determines:

• How long users must wait for full redemption
• The specific receipt token received (e.g., cdfUSDS-1m vs cdfUSDS-3m)
• The position's expiry date for conversions

Supported Assets

Initially, Convertible Deposits support:

• USDS: The primary stablecoin for initial launch

The system is designed to expand to other reserve assets based on protocol needs and governance decisions.

3. The Auction Mechanism

How Pricing Works

The auction uses a sophisticated tick-based system to determine conversion prices dynamically based on supply and demand:

Tick System Explained

• Ticks: The auction is organized into price levels called "ticks"
• Tick Capacity: Each tick can sell a specific amount of OHM (the "tick size")
• Tick Price: Each tick has a conversion price (deposit tokens per OHM)
• Tick Step: When a tick is filled, the next tick's price increases by a percentage (the "tick step")

How Bids Fill Ticks

When users place bids, the system processes them by filling ticks sequentially:

1. Current Tick: The system determines how many deposit tokens are needed to fill the remaining capacity of the current tick
2. Fill and Move: If the bid exceeds this amount, it fills the current tick completely and moves to the next higher-priced tick
3. Repeat Process: This continues across multiple ticks until the entire bid is processed
4. Calculate Average: The final conversion price is the weighted average based on the total deposit tokens consumed and total OHM allocated

Example Bid Processing

For a 1,000 USDS bid:

• Current tick has 500 USDS capacity remaining at $20/OHM = 25 OHM
• Next tick needs 500 USDS at $22/OHM = ~22.73 OHM
• The position receives ~47.73 OHM total with an average conversion price of ~$20.96/OHM

Dynamic Price Discovery

Price Increases with Demand

• As ticks fill up, subsequent bids must pay higher prices
• Large bids that span multiple ticks drive prices up faster
• High demand periods see rapid price escalation

Price Decreases Without Demand

• When there's insufficient demand, tick prices decay over time
• Unused capacity causes the auction to move to lower-priced ticks
• Price decay has a floor - the minimum price set as part of the auction parameters
• This ensures competitive pricing during low-demand periods while protecting the protocol

Daily Targets and Capacity

• The protocol sets a target amount of OHM to sell per day
• Capacity is added proportionally throughout each day
• When daily targets are exceeded, the tick size will adjust according to the tick size base and multiple of the daily target that has been achieved
  • For example, with a tick size base of 2, day target of 2000 OHM and tick size of 1600 OHM: at 6000 OHM sold in the day, there is a multiplier of 3 (6000/2000). The tick size will be adjusted to standardTickSize / tickSizeBase^multiplier, which is 1600 / 2^3 = 200 in this scenario.
• Day targets and tick sizes are reset once per day when the auction parameters are tuned by the Emissions Manager

Minimum Price Protection

The auction maintains a minimum conversion price floor - meaning there's a maximum amount of OHM users can get per deposit token. This protects the protocol from selling OHM too cheaply during periods of very low demand.

Making a Deposit

When users are ready to make a convertible deposit, here's the step-by-step process:

1. Choose Parameters

Deposit Amount

The quantity of stablecoins to deposit

Deposit Period

Select from available periods (currently 1, 2, or 3 months)

Minimum OHM Out

Set a minimum amount of convertible OHM willing to accept (slippage protection)

Position Options

• Choose whether to wrap the position as an ERC721 NFT
• Choose whether to wrap receipt tokens as ERC20 tokens

2. Preview Your Bid

Before committing, users can preview their bid to see:

• The conversion price they'll receive
• The amount of OHM they'll be able to convert to
• How the bid will affect current tick prices
• Which ticks the bid will consume

This preview function helps users understand the impact of their bid size on pricing.

3. Submit Your Bid

After submitting a bid:

• The user's stablecoins are transferred to the DepositManager
• The user receives receipt tokens (e.g., cdfUSDS-3m)
• The user's position is created with locked-in conversion terms
• The auction state updates with the bid

4. Receive Assets

After a successful bid, users receive:

• Receipt Tokens: ERC6909 tokens representing the deposit that will be displayed in the Olympus frontend. These can optionally be wrapped to ERC20 for composability with other protocols
• Position Record: Contains the specific conversion price and terms
• Optionally: ERC721 NFT if they chose to wrap their position

Understanding the Conversion Price

The conversion price represents the weighted average of all ticks the bid consumed. This price is locked in for the entire deposit period, regardless of how the auction price moves afterward. The size of the bid relative to available tick capacity affects the average conversion price, as larger bids may consume higher-priced ticks.

4. Managing Your Position

Once users have a convertible deposit, they have several options for managing and exiting their position. Each option serves different strategic purposes and timing considerations.

Converting to OHM

Converting to OHM is the primary way to profit from a convertible deposit when OHM's market price exceeds the conversion price.

When to Convert

• Any Time Before Expiry: Users can convert at any point before their position's expiry date
• Profitable Scenarios: Convert when OHM's market price is higher than the locked-in conversion price
• Partial Conversions: Users can convert portions of their position, not necessarily the entire amount

Conversion Process

1. Check Profitability: Compare current OHM market price to the conversion price
2. Specify Amount: Choose how much of the position to convert (partial conversions allowed)
3. Execute Conversion: Receipt tokens are burned, deposit tokens are sent to the protocol treasury, and the user receives newly minted OHM
4. Position Update: The position record is updated to reflect the remaining unconverted amount

What Users Need

• Their Position: Users need their position record (the conversion price and terms)
• Receipt Tokens: Required for conversion - these will be burned
• Before Expiry: Must convert before the position expiry date

Early Reclaim

Early reclaim allows users to exit their position immediately but with a discount applied to their original deposit. The reclaim rate, which determines the discount, is configured by governance on a per-asset basis.

When to Use Early Reclaim

• Need Liquidity: Users need access to their funds immediately
• Market Conditions: Users believe OHM won't reach profitable conversion levels
• Risk Management: Users want to exit early to avoid potential losses

Reclaim Process

1. Choose Amount: Specify how many receipt tokens to reclaim
2. Accept Discount: Acknowledge that a discount will be applied
3. Execute Reclaim: Receipt tokens are burned and the user receives discounted deposit tokens
4. Protocol Fee: The discount amount goes to the protocol treasury

Important Notes

• Receipt Tokens Required: Users need receipt tokens for reclaim - they will be burned
• Reclaim Rate: The percentage of the deposit received when reclaiming early
• Reclaim Discount: The reclaim discount is 100% minus the reclaim rate
• Governance Configured: Reclaim rates are set by governance for each supported asset
• Immediate Access: Users get their funds immediately, no waiting period

Full Redemption

Full redemption allows users to get back their complete original deposit after waiting for the appropriate period.

Standard Redemption Process

Two Redemption Approaches

• Receipt Tokens Only: Standard redemption using just receipt tokens - users must wait for the full deposit period to pass from the current date
• Receipt Tokens + CD Position: Uses the position to align timing - users must wait for the conversion expiry to pass (even if it's in a short time, or already in the past)

Starting Redemption

1. Transfer Receipt Tokens: Receipt tokens are transferred to the DepositRedemptionVault
2. Select Facility: Choose which facility to use for redemption (usually the convertible deposit facility)
3. Commitment Period: Tokens are locked for the appropriate waiting period based on the approach
4. Receive Redemption ID: Users get a redemption ID to track their redemption

Waiting Periods

• Without Position: Wait for the full deposit period from when redemption starts (e.g., 3 months from today)
• With Position: Wait only until the conversion expiry date passes (could be immediate if already expired)

During the Wait Period

• Tokens Locked: Receipt tokens remain in the redemption vault
• Full Amount Reserved: The underlying deposit amount is committed for the redemption
• Option to Cancel: Users can cancel and get their receipt tokens back (resets the timer)

Finishing Redemption

After the appropriate period completes:

1. Initiate Completion: Call the finish redemption function
2. Token Exchange: Receipt tokens are burned
3. Receive Deposit: Users get back their full original deposit amount

Borrowing Against Redemptions

While a redemption is in progress, users can borrow against the committed amount. Note: Borrowing functionality is disabled in the initial rollout and will be enabled in a future update.

How Borrowing Works

• Loan Amount: Borrow up to a configured percentage of the redemption amount
• Fixed Interest: Loans have fixed interest rates matching the redemption period
• Collateralized: The active redemption serves as collateral

Repayment Process

• Interest First: Repayments first cover interest, then principal
• Protocol Fees: Interest payments go to the protocol treasury
• Flexible Timing: Users can repay at any time during the loan period

Loan Extensions

• Monthly Extensions: Extend the loan by one or more months
• Extension Fees: Interest is charged at the time of extension
• Multiple Extensions: Users can extend multiple times if needed

Default Scenarios

• Loan Expiry: If users don't repay or extend before expiry, the loan defaults
• Third-Party Claims: Anyone can claim against a defaulted loan for a keeper reward
• Partial Recovery: Users retain any principal that was repaid; the protocol claims the remainder

Important Borrowing Restrictions

• No Redemption While Borrowing: Users cannot complete their redemption while they have an open loan
• Must Repay First: Either repay the loan in full or wait for it to default before completing redemption
• Single Loan: For a given redemption, only one loan can be taken

Borrowing Benefits

• Maintain Position: Keep the redemption active while accessing liquidity
• No Early Exit: Avoid reclaim discounts while still getting funds
• Flexible Terms: Extend as needed based on the situation

5. Practical Guidance

Choosing Your Strategy

Decision Framework

When considering convertible deposits, users should consider:

• OHM price outlook: Bullish expectations favor conversion strategies
• Certainty level: High uncertainty favors redemption-focused approaches
• Liquidity timeline: Need funds soon? Consider borrowing vs. early reclaim costs
• Risk tolerance: Higher risk tolerance allows for longer periods and larger positions

Strategy Matrix

OHM Outlook	Liquidity Need	Recommended Approach
Bullish	Low	Longer periods, plan to convert
Bullish	High	Shorter periods or borrowing strategy
Uncertain	Low	Full redemption with position timing
Uncertain	High	Conservative sizing, early reclaim acceptable
Bearish	Any	Avoid or use very short periods

Risk Management

Position Sizing

• Start Small: Begin with smaller amounts to understand the system
• Diversify Periods: Don't concentrate everything in one deposit period
• Liquidity Buffer: Maintain separate funds for unexpected needs

Monitoring Positions

• Set Price Alerts: Know when OHM reaches profitable conversion levels
• Track Expiry Dates: Conversion opportunities have hard deadlines
• Auction Awareness: Daily parameter resets can affect future deposits

Exit Planning

• Pre-Define Targets: Decide profit-taking levels before emotions get involved
• Understand All Costs: Factor in gas fees, reclaim discounts, and borrowing interest
• Have Backup Plans: Know options if the primary strategy doesn't work out

Common Mistakes to Avoid

Timing Errors

• Missing Expiry: Conversion rights expire - set calendar reminders
• Poor Auction Timing: Large bids right after daily resets may get better prices
• Panic Decisions: Don't rush to early reclaim during temporary market stress

Technical Mistakes

• Losing Receipt Tokens: These are required for all actions - store them safely
• Wrong Redemption Type: Understand when to use position vs. non-position redemption
• Incomplete Understanding: Don't borrow against redemptions unless the restrictions are understood

Strategic Mistakes

• Overcommitting: Don't deposit more than can be afforded to lose or have locked up
• Ignoring Opportunity Costs: Consider what else could be done with the funds
• Single Strategy: Markets change - be prepared to adapt the approach

6. Technical Details & FAQ

Fee Structures

Early Reclaim Discounts

• Applied when users exit their position before the deposit period completes
• The reclaim rate varies by asset and deposit period
• Reclaim rates are configured by protocol governance for each supported asset
• The reclaim discount is 100% minus the reclaim rate
• Discount amount goes to the protocol treasury
• No fees for conversion or full redemption

Borrowing Fees

• Interest Rates: Fixed rates set when users borrow, typically matching deposit period duration
• Extension Fees: Additional interest charged when extending loan terms
• Keeper Rewards: Third parties earn rewards for claiming defaulted loans
• No Early Repayment Penalties: Users can repay loans at any time without fees

Gas Costs

• Standard Ethereum transaction fees apply for all operations
• More complex operations (like multi-tick bids) may use more gas
• Consider gas costs when planning smaller positions

Configuration

Initial Parameters

Assets

• Supported Asset: USDS
• Deposit Periods: 1, 2, and 3 months
• Yield Strategy: USDS deposits earn Sky Savings Rate through sUSDS vault
• Minimum Deposit: 1 USDS
• Deposit Cap: 1,000,000 USDS
• Borrowing Configuration: 0% (disabled at launch, will be enabled in future update)
• Reclaim Rate: 90% (90% of the deposited amount will be returned upon reclaim)

Auction

• Tick Size: 150 OHM (halves when daily target is exceeded)
• Tick Step Multiplier: 100.75% (0.75% increase per tick)
• Tick Size Base: 2
• Tracking Period: 7 days
• Minimum Bid: 100 USDS

Emission Mechanics

• Base Emissions Rate: 0.02% of supply/day
• Minimum Price: 120% of market price
• Backing: 11.69 USDS/OHM
• Minimum Premium: 50% (the market price of OHM must be >= 17.535 USDS/OHM)
• Restart Timeframe: 11 days
• Bond Market Capacity: 0% (there will be no bond market for undersold OHM)

Common Questions

Getting Started

Q: How much should I deposit for a first position? A: Start with an amount that's comfortable to potentially lose or have locked up. This helps learn the system without significant risk.

Q: Which deposit period should I choose? A: Longer periods give more time for profitable conversions but reduce flexibility. Consider liquidity needs and OHM price outlook.

Q: Can I change my mind after depositing? A: Yes, through early reclaim (with discount) or redemption (with waiting period). The conversion price cannot be changed once set.

Q: What can I do with my receipt tokens before expiry? A: You can exchange the receipt tokens in a liquidity pool, reclaim the deposit (with a discount), redeem the deposit (waiting period), or redeem the deposit and borrow against it once borrowing is enabled.

Q: Will USDS deposits be lent out to earn yield? A: USDS deposits are deposited into the sUSDS vault to earn the Sky Savings Rate. The goal is to maintain a low-risk approach while generating yield for the protocol.

Q: How can I deposit large amounts? A: For large deposits, consider breaking up bids over time to give the price time to decay between bids. Large bids that consume multiple ticks will result in a weighted average conversion price.

Q: What happens if the auction target is not reached? A: The auction tracking period defines a number of days that the auction results (relative to the target, e.g. sold - target) will be tracked. At the end of the tracking period, if the sum of those results is negative (meaning that less OHM was sold through auctions than the target emissions) a bond market will be created to instantaneously sell the under-sold OHM. This increases the likelihood of the target emissions being reached.

Note that the bond market capacity is affected by the bond market capacity scalar.

Managing Positions

Q: What happens if I lose my receipt tokens? A: Receipt tokens are required for all actions. If lost, users cannot convert, reclaim, or redeem their position. Store them securely.

Q: Can I transfer my position to someone else? A: Yes, if wrapped as an ERC721 NFT. Receipt tokens are also transferable. The new holder inherits the conversion terms.

Q: What happens if OHM never reaches my conversion price? A: Users can still get their full deposit back through redemption, or exit early through reclaim (with discount).

Q: Will Olympus offer borrowing against receipt tokens? A: Yes, borrowing functionality will be available to receipt token holders when they start the redemption process. This feature is planned for implementation after the initial launch.

Q: Can the CD position be traded as an NFT? A: Yes, the convertible deposit position can be wrapped to an ERC721 NFT, allowing it to be traded on NFT marketplaces.

Q: Will there be different options for CDs with various strike prices or lengths? A: The conversion price is determined through auction results at the time of purchase, while the deposit period is defined by governance. Users can choose from available periods (1, 2, or 3 months).

Q: Will "looping" be easy for regular users? A: Looping is generally an advanced-user action. While it's possible, it isn't currently implemented in the interface and is more suited for sophisticated users.

Q: What's the best outcome for the protocol - if users exercise or not? A: The protocol benefits from various outcomes: conversions provide OHM distribution, early reclaims generate protocol income through discounts, and redemptions maintain treasury stability.

Redemption and Borrowing

Q: What's the difference between redemption approaches? A: Without position: wait full deposit period from start date. With position: wait only until conversion expiry (could be immediate if expired).

Q: Can I borrow against my redemptions? A: Borrowing functionality is disabled in the initial rollout and will be enabled in a future update. Once enabled, borrowing will be limited to a configured percentage of the redemption amount (typically less than 100%).

Q: What happens if I default on a borrowing loan? A: Third parties can claim the default for a reward. Users keep any principal repaid, but lose the remainder to the protocol.

Technical Issues

Q: Why can't I see my receipt tokens in my wallet? A: ERC6909 tokens may not display in all wallets. The Olympus frontend will show them, or they can be wrapped as ERC20 for broader compatibility.

Q: My transaction failed - what went wrong? A: Common issues include insufficient token approval, slippage on conversion amount, or trying to convert after expiry. Check error messages for specifics.

Q: Can governance change my position terms? A: No, conversion price and expiry are immutable once set. Governance can change future auction parameters but not existing positions.

Q: Are all bids in an auction settled at the same price? A: No, bids are processed through the tick system where each tick has a different price. Large bids may consume multiple ticks at different prices, resulting in a weighted average conversion price.

Q: Where does the auction price start relative to market price? A: The auction starts at the minimum price and won't go below that floor. The minimum price is set once per day at the time of auction tuning, with the following formula:

minimumPrice = marketPrice * minimumPriceScalar

minimumPriceScalar must be greater than 100%.

Q: How does price decay work in the auction? A: Price decay occurs only after an auction has started and no bids have come in at a certain tick for a period of time. The price will decay continuously while there are no bids, but it cannot go below the minimum price floor.

Q: What happens at expiry? A: At expiry, you can no longer convert to OHM. Your options are limited to redemption (if you haven't started it) or reclaim (with discount).

Q: Is the position auto-redeemed at expiry? A: No, positions are not auto-redeemed. You must manually start the redemption process or reclaim your deposit. However, you can start redemption right after minting so you don't have an additional waiting period.

Q: Where will the market for receipt tokens be? A: There are no plans to seed the market at launch. Anyone could create liquidity pools on decentralized exchanges like Uniswap. Once receipt tokens are wrapped to ERC20, any ERC20 AMM could be used.

Q: Can you explain how CD pricing works relative to market price? A:

1. Starting price is the minimum price price.
2. As bids come in, the convertible price of OHM in the CD position goes up (amount depends on bid size).
3. If there are no bids for some time, the price will decay with a floor of the minimum price.

Q: Is tick capacity first come first serve to bidders? A: Yes, the auction system processes bids on a first-come-first-serve basis within each tick. When a tick is filled, the system moves to the next higher-priced tick.

Q: What is the rationale behind needing to trigger redemption? Why not auto-redeem after expiry? A: The manual redemption trigger provides flexibility for users to convert at optimal times and allows for borrowing functionality.

Q: How does the auction timing work? When do markets open? A: The auction is continuous and infinite capacity. Parameters (min price, target) are set once per day as part of the periodic heartbeat. Bids can take place at any time, and capacity is added proportionally throughout each day. Note that the auction will only be enabled if the EmissionsManager determines that there is a premium. If the auction is disabled, no bids can be made.

Q: Will there be a countdown timer to the next market opening? A: The auction is tied to the Olympus heartbeat system which operates three times a day (every 8 hours). However, since it's a continuous auction, there are discrete opening times - bids can be placed at any time once the market is live.

Q: In what scenario would you not want to hit redeem right after minting? A: You might delay redemption if you want to maintain the option to convert at a favorable price, or if you plan to borrow against the redemption once that functionality is enabled.

Troubleshooting

Transaction Failures

• Insufficient Approval: Ensure the DepositManager is approved to spend deposit tokens
• Slippage Protection: The minimum OHM out may be too high for current auction conditions
• Expired Position: Cannot convert positions past their expiry date
• Insufficient Balance: Ensure there are enough tokens for the desired action

Missing Tokens or Positions

• Check Token Addresses: Ensure you are looking for the correct receipt token contract
• Blockchain Confirmation: Transactions may take time to confirm during network congestion
• Correct Network: Verify you are connected to the correct Ethereum network

Unexpected Behavior

• Auction Parameter Changes: Daily resets can change pricing - this is normal behavior
• Partial Fills: Large bids may only partially fill if insufficient tick capacity
• Borrowing Restrictions: Cannot complete redemption while loans are outstanding

Getting Help

For additional support:

• Olympus Discord: Community and team support
• Documentation: Latest protocol documentation at docs.olympusdao.finance
• Protocol Updates: Follow @OlympusDAO for important announcements

Security Reminders

• Smart Contract Risk: While audited, DeFi protocols carry inherent risks
• Key Management: Securely store private keys and seed phrases
• Verify Contracts: Always interact with official Olympus contracts
• Stay Informed: Keep up with protocol updates and security announcements

7. Adding Support for New Assets

Overview

The Convertible Deposits system is designed to be extensible, allowing the protocol to add support for new assets over time through the standard Olympus governance process.

Asset Addition Procedure

Step 1: Asset Evaluation

Before proposing a new asset, evaluate the following criteria:

Technical Requirements

• Token Standard: Must be ERC20 compliant
• Decimals: Must have a standard decimal configuration (typically 6 or 18)
• Liquidity: Sufficient on-chain liquidity for the asset to support deposit volumes
• Stability: Price stability characteristics suitable for convertible deposits

Risk Assessment

• Smart Contract Risk: Audit status and security history of the asset
• Counterparty Risk: Dependency on external systems or oracles
• Market Risk: Volatility and correlation with other protocol assets
• Regulatory Considerations: Compliance requirements for the asset type

Yield Potential

• Native Yield: Does the asset generate yield on its own?
• Vault Options: Are there reliable ERC4626 vaults available?
• Risk-Adjusted Returns: Yield potential relative to risk profile

Step 2: Governance Process

Request for Comment (RFC)

• Post a detailed RFC on the Olympus forums
• Include comprehensive analysis of the proposed asset
• Outline technical requirements, risk assessment, and expected benefits
• Gather community feedback and address concerns

Olympus Improvement Proposal (OIP)

• Submit a formal OIP based on the RFC discussion
• Include finalized technical specifications and implementation details
• Subject to community review and discussion period
• Build consensus among key stakeholders

OCG Proposal

• Submit a final OCG proposal for implementation
• Include all technical specifications and governance parameters
• Subject to standard Olympus governance voting procedures
• Requires quorum and approval thresholds as defined in governance parameters

Step 3: Implementation

Technical Deployment

• Deploy a new auctioneer contract for the new deposit asset (no code changes needed)

OCG Proposal Execution

• Enable the auctioneer for the new asset
• Enable the asset on the DepositManager (including the ERC4626 vault for yield)
• Set up receipt token naming conventions
• Set the reclaim rate and borrowing parameters

Future Considerations

Potential Asset Categories

• Stablecoins: Other major stablecoins with established track records
• Yield-Bearing Assets: Tokens that generate native yield
• LSTs: Liquid Staking Tokens with reliable oracle pricing
• RWA Tokens: Real World Asset tokens with appropriate risk profiles

Governance Parameters

• Each new asset will require individual parameter tuning
• Risk limits may be set per asset type
• Yield strategies will be selected based on asset properties