Key Features of OMM
Fungibility is key to OMM:
The OMM protocol will aggregate the supply of each asset provided to the protocol by its users. To create fungibility throughout the protocol, each asset supplied to a market is represented by an IRC-2 token (‘OToken’).
Individuals or groups (P-Reps) with long-term investments in ICX and ICON-based assets can use OMM to improve their capital efficiency and generate additional returns through interest.
The process of determining interest rate in OMM:
Borrowers’ interest will be distributed to the Suppliers and the DAO fund operated by OMM Token holders. Interest rates are determined as a function of the Utilization Rate. Both supply and borrowing interest rates rise in tandem with utilization.
The avoidance of bank run situation in OMM:
Both supply and borrow interest rates rise in tandem with utilization. This helps prevent a bank run situation because, as utilization increases, Borrowers become more incentivized to pay off their debt (rising interest rates on debt) and Suppliers become more incentivized to deposit more assets (rising interest rates on deposits).
Both paying off debt and supplying additional assets will increase the liquidity of the OMM protocol. In addition, the Utilization Rates of all money markets will be capped at 90% during the initial launch, in which suppliers can still redeem, but borrowers can’t borrow anymore, further preventing a bank run situation.
What is there for users of OMM?
Staking OMM Tokens will be rewarded with a portion of daily OMM distribution. However, there is a 3-day unstaking period. In the future, up to 20% of the staked OMM can be used as an initial insurance pool in case of a potential exploit of the OMM protocol.
OMM holders will be entitled to governance rights of the protocol, delegation rights of the staking pool for ICX deposits, and usage of the OMM DAO fund.
OMM’s governance decision-making for future updates will be based on ownership weight in OMM. The consensus among OMM holders will be required to adjust the protocol. Voting will be done on-chain and is therefore binding, so each adjustment, once approved, will be implemented into the protocol.
Governance rights include, but are not limited to:
- Adjustments to Max Loan to Value (LTV)
- Adjustments to Liquidation Threshold
- Adjustments to the interest rate models
- Adjustments to the interest rate parameters
- Adjustments to the oracle address
- Adjustments to Omm Worker Tokens (OWT)
- Addition/removal of a specific money market
All OMM Tokens will be earned by using the OMM protocol and will be minted on daily basis and the users of the protocol can claim their rewards on a per-second basis, There is a daily distribution for DAOfund and worker token
OMM Token will be distributed:
Day 1-30: 1M/day (30M tokens)
Day 31-365: 400K/day (134M tokens)
Year 2: 300K/day (109.5M tokens)
Year 3: 200K/day (73M tokens)
Year 4: 100K/day (36.5M tokens)
Year 5+: 3% Annual OMM token inflation
The categories of OMM distribution are:
- DAO fund (40%)
- OMM Worker Tokens (30%)
- Liquidity pools (15%)
- OMM / sICX (5%)
- OMM / IUSDC (5%)
- OMM / USDS (5%)
- Markets (10%)
- 4% to ICX/sICX (3.6% for supplying/0.4% for borrowing)
- 3% to IUSDC (1.5% for supplying/1.5% for borrowing)
- 3% to USDS (1.5% for supplying/1.5% for borrowing)
- OMM staking (5%)
The liquidation opportunities will be available to those who run liquidation bots, and anyone who is able to provide a bad debt asset will be able to participate in the auction to collect the collateral with the 10% added bonus.
The benefits to suppliers:
Suppliers will receive oTokens reflective of the amount of the supplied assets and will receive additional oTokens reflective of interest accrued when interacting with any of OMM’s smart contracts (Lend, Redeem, Borrow, Repay, Liquidation). This design allows users to earn interest by simply holding an IRC-2 OToken
Additionally, by depositing assets, suppliers receive OMM Tokens, which represent ownership in the OMM protocol and come with several benefits.
The benefit to borrowers:
At launch, OMM will support ICX, USDS (Stably USD), and iUSDC (wrapped USDC). Each of these markets will have a max LTV of 0.5 or said another way, a collateralization ratio of 200%. However, users are recommended to start with a lower LTV of 0.33 (half the liquidation threshold) to get used to the money market protocol.
To create fungibility throughout the protocol, each asset borrowed from a market is represented by an IRC-2 token (“dToken”). Users will receive dTokens reflective of the amount of the borrowed assets, and will receive additional dTokens reflective of interest accrued when interacting with any of the OMM protocol’s smart contracts (Lend, Redeem, Borrow, Repay, Liquidation.