This Stablecoin Earns Yield In Your Wallet: Interview with Matthew Liu, cofounder of Origin Protocol.

This week Origin Protocol has relaunched its OUSD stablecoin after a major hack last November. Prior to the relaunch, Origin announced an unprecedented compensation plan to reimburse its users. Additionally, the team launched a staking program on the Origin Dollar (OUSD) DApp. To talk more about the latest, we sat down with Origin’s cofounder Matthew Liu.              

Matthew, what is Origin Protocol and what is Origin Dollar? 

With a mission to enable true peer-to-peer commerce, Origin is building the future of internet commerce using blockchain technology. The Origin Platform, which consists of a series of protocol smart contracts and multiple user-facing applications, allows buyers and sellers to connect and transact on the blockchain. Our goals are to reduce/remove unnecessary transaction fees charged by intermediaries, promote open and censorship-resistance commerce, and give early ecosystem participants stakes in the commerce network as it grows over time. Origin Protocol is built on the Ethereum blockchain.

Origin Dollar (OUSD) is a new stablecoin that was first launched by the Origin team in September 2020 to further advance peer-to-peer commerce. Built on the Ethereum network, OUSD’s design is superior to existing stablecoins as it captures competitive yields while being passively held in users’ crypto wallets. OUSD is an ERC-20 compliant token that is backed 1:1 by other stablecoins like USDT, USDC and DAI. As a result, 1 OUSD should always be very close to 1 USD in value. Users can convert their existing stablecoins (currently USDT, USDC, and DAI) to OUSD at the official Origin Dollar DApp. Issued OUSD begins accruing yield that compounds immediately without requiring any staking or locking that is typically required to earn DeFi yields. OUSD can be transferred instantly just like any ERC-20 token and is therefore well-designed for commerce transactions while still earning yield.

Tell us more about the Origin staking program and the benefits?

Origin staking was recently launched on the Origin Dollar (OUSD) DApp at ousd.com/stake. Origin Token (OGN) is the governance token for the Origin Platform, including the OUSD protocol and Origin’s multiple commerce products. OGN holders can stake their OGN to earn up to 25% annual interest with flexible maturities. Our initial staking program offers three staking periods and respective yields:

  • 30-day staking period: Earn 7.5% annualized interest
  • 90-day staking period: Earn 12.5% annualized interest
  • 365-day staking period: Earn 25% annualized interest

Staked tokens will be locked for the duration of the staking period. After each staking period ends, users will be able to claim both their initial OGN (principal) and yield (interest). Over time, OGN staking will also introduce new utility for staked tokens.

The launch of the OGN staking program will yield strong benefits to OGN’s token economics. As OGN token holders begin staking tokens, they will lock up tokens that are currently being actively traded. 

Since our public launch, we’ve locked up an additional 5M OGN from the broader community, bringing total locked tokens to ~45M OGN, with 40M tokens being locked by our previous private sale investors and team. As we build improvements to OGN staking, we expect staking participation to further increase. You can review additional token metrics at the OGN dashboard. You can also find OGN staking data on stakingrewards.com, one of the most trusted sources for information on staking opportunities.

To further elaborate, OGN will become the governance token of OUSD and our commerce products (e.g. Dshop) as the Origin Platform becomes progressively more decentralized. OGN holders will be able to create and vote for proposals that determine the future direction of OUSD. In addition, future protocol fees generated by OUSD and our commerce products will accrue to OGN holders. It is our goal to increase the circulating supply of OUSD while minimizing the increase of circulating supply of OGN to create favorable economics for both tokens. With success in increasing the circulating supply and usage of OUSD, there will naturally be opportunities to introduce lightweight and thoughtful monetization strategies that will benefit existing and new OGN holders. Similarly, as we roll out new commerce products that may generate revenue, we will drive more value to OGN.

How does Origin Dollar make spending and saving better than traditional savings and money markets?

OUSD automatically earns competitive yields from DeFi protocols while it’s still sitting in your wallet. With APYs that oftentimes reaches the mid double-digits, OUSD returns trounce savings and money markets in traditional finance. OUSD is also an ideal store of value for users in countries with hyperinflationary economies like Argentina and Venezuela. As a transparent unit of account, users can easily track DeFi earnings & deployed strategies via OUSD vault smart contracts data without complicated spreadsheets or custom dashboards.

You can also use OUSD as an instant peer-to-peer payment method instead of using PayPal or Venmo. Your friends and family will earn attractive yields immediately upon receipt. For international payments, your recipients also will receive OUSD without losing the average of 6-7% on remittance fees.

Beyond being a yield-generating asset, OUSD will be integrated into existing and future Origin commerce applications. With the recent OUSD relaunch, Dshop (Origin’s blockchain-powered e-commerce platform) merchants will be able to accept OUSD as a preferred form of payment. For merchants that have traditionally been skeptical of receiving cryptocurrency payments, being able to accept a yield-bearing asset that beats traditional savings and money markets accounts is a powerful motivator to switch from credit cards that charge 2.9% fees and other traditional payment mechanisms. OUSD will be accepted by hundreds of sellers on the Origin Dshop Network and peer-to-peer marketplaces. 

It’s important to note that OUSD is designed to be a decentralized protocol governed by many stakeholders all over the world. We believe that the minters and holders of OUSD should collectively determine important protocol decisions beyond simply earning and benefiting from double-digit returns. It is our intent to relinquish control and governance to the community as soon as possible.

Could you give us a walkthrough of the OUSD DApp and how to use it? 

Users can mint OUSD by converting their existing stablecoins (currently USDT, USDC or DAI) into OUSD at the official Origin Dollar DApp. Using a web-3 enabled cryptocurrency wallet like Metamask, users can create or trade in OUSD. Once OUSD is minted, it is sent to users’ connected crypto wallets, and the newly minted OUSD will begin accruing compounding yield immediately. The OUSD smart contract will deploy users’ underlying capital (USDT/USDC/DAI) to a diversified set of yield-earning strategies, rebalancing over time to achieve great yields while diversifying risk. All users have to do is simply hold OUSD in their wallets and watch their OUSD balance grow. 

As with any Ethereum transaction, users will need Ether to interact with the OUSD smart contract. We have taken measures to reduce gas usage where possible, but these costs can vary. Additionally, to encourage long-term holding of OUSD and to protect the protocol from attackers, an exit fee of 0.5% is charged on all redeems (trading in OUSD to convert back into USDT, USDC or DAI). For more details, refer to our OUSD documentation.

Do you have any other opportunities for investors and partners at Origin?

We are actively exploring various partnership opportunities within the DeFi space, including OUSD insurance integration, OGN & OUSD lending/staking protocol integration, Dshop merchant partnerships, and OUSD and OGN exchange listings on centralized/decentralized exchanges. If you’d like to chat, please reach out to our Head of Business Development, Coleman Maher (coleman@originprotocol.com). 

We have completed our 3 fundraising rounds (private sales) as of mid-2018 and raised $38M to date. If you are interested in chatting with our investor relations team to discuss your existing ownership of OGN or to inquire about OTC and private placement opportunities, please reach out to ir@originprotocol.com. Origin has retained multiple OTC partners to assist token purchasers that wish to participate in Origin without purchasing on existing centralized or decentralized exchanges.

How Safe is Origin Dollar, would you like to talk about your legal and security measures?

OUSD has recently undergone rigorous security upgrades and has been audited by two reputable security firms. We are highly confident that our OUSD is a safe and secure product that can deliver high yields to our users with our relaunch.

On November 7th 2020, while OUSD was recently launched and not yet audited, the protocol was exploited for 7M USD due to a previously undetected reentrancy bug. You can read more details about the hack on our blog as well as the detailed compensation plan for taking care of the affected users. We just relaunched Origin Dollar after completing multiple audits and security upgrades to ensure this never happens again. 

Since the exploit, OUSD has been audited by multiple, well-respected security firms. We have worked with both Trail of Bits and Solidified to audit all of the code that powers Origin Dollar. We intend to continue working with respected security auditing firms to review our work. 

We’re also exploring working with reputable insurance providers to make DeFi insurance available to OUSD holders. Origin intends to deploy significant capital as the initial coverage provider. We’ll be sharing more details in the near future.

Security is our top priority and we’ve taken every effort to make sure our code is secure and works as intended. While we will continue to strive to offer highly competitive yields, we will prioritize security over everything else. 

It’s important to note that as with any interest-bearing instrument, there are associated risks (smart contract risk, underlying platform and stablecoin risk) with holding OUSD that are important to understand. Visit our OUSD doc for more details.

What is the current market size of the stablecoin markets and what do we expect by 2021 and beyond?

Tether first introduced the concept of a USD-denominated stablecoin in 2014. Since then, stablecoins have proven themselves as an ideal way of transferring value without exposing users to the price volatility of free-floating currencies. 

Today, more value is transferred via Tether than with Bitcoin. The total market capitalization of stablecoins has grown from $2.6 billion at the start of 2019 to over $20 billion. Tether (USDT), at $20 billion, leads the way, with U.S. dollar coin (USDC) in second at $3.4 billion followed by Multi-Collateral Dai (DAI) with a $1 billion market cap. Meanwhile, Decentralized Finance (DeFi) has experienced an explosion of growth with billions of dollars of capital now locked up in smart contracts that generate yields from lending and trading protocols.

One of the problems with existing stablecoins is that users have to constantly choose between holding an easily spendable coin and earning yields by locking their tokens up in smart contracts. To make matters worse, yields from lending and trading activities change rapidly. Sophisticated DeFi yield earners are familiar with constantly having to rebalance their portfolio of assets across many competing platforms. This is time-consuming and expensive as gas fees once again eat into yields. As a result, while DeFi is growing extremely rapidly, it still makes it difficult for many cryptocurrency users to participate.

With OUSD, there’s no need to unwind complicated positions when you want to spend your OUSD. You can transfer it freely without having to pay gas to unlock spendable capital. In addition, OUSD gives you access to some of the highest-earning opportunities across DeFi with none of the hassles. The OUSD smart contract will deploy your underlying capital to a diversified set of yield-earning strategies, rebalancing over time to achieve great yields while diversifying risk. Earnings automatically accrue in your wallet and compound continuously while you hold OUSD. As the world’s first stablecoin that automatically earns interest while being held in crypto wallets, we believe OUSD has the power to fundamentally change and shape the future of stablecoin markets.

Angela Scott-Briggs: Editor, TechBullion.com | Interested in Innovations in Business, Finance, and Technology .
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