The Origin Dollar (OUSD) is an interest-earning stablecoin backed by other stablecoins.
They claim the Origin Dollar was generating a 1.72% annual percentage yield in the 30-days ending on 1 September 2022. Origin Dollars generate the yields through open-source, on-chain yield farming. Yet you can keep OUSD in popular cryptocurrency wallets like other stablecoins.
An Origin Dollar is an ERC-20 compliant token built for the Ethereum network. They back OUSD one with other three other stablecoins, Tether (USDT), USD Coin (USDC), and DAI (DAI).
How the Origin Dollar uses Stablecoins
The difference between the Origin Dollar and most stablecoins is that the Origin Dollar holds funds as stablecoins. For instance, stablecoins such as Tether hold fiat currencies, usually US Dollars in bank accounts. When you spend a Tether, a smart contract makes payment in US Dollar.
Conversely, the Origin Dollar holds US Dollars in USDT, DAI, or USDC stablecoins. When you spend an Origin Dollar, the Origin Dollar smart contract makes payment from stablecoins. They back each Origin Dollar with one of those stablecoins. Theoretically, this gives an OUSD a value of one US Dollar.
Users mint Origin Dollars by converting Tether, Dai, or USD Coin into OUSD through the Origin Dollar DApp. You can also buy OUSD through the Origin Dollar DApp. The Origin Dollar DApp can either mint new OUSD or transfer existing coins to a buyer.
They store Origin Dollars in a vault. Origin Dollar makes money by charging 0.25% on coins redeemed from the vault.
How OUSD earns Yield on Stablecoins
The Origin Dollar protocol generates yields by deploying the underlying stablecoins to DeFi protocols such as Compound, Aave (AAVE), and Curve (CRV).
The Origin Dollar DApp pools collected interest, trading fees, and rewards tokens and converts them into stablecoins to produce OUSD denominated yields. To get the best yield, the Origin Dollar protocol moves assets in and out of different liquidity pools.
The Origin Dollar DApp distributes returns to OUSD holders by constantly rebasing the money supply. Origin Dollar constantly adjusts the money supply in response to the yield the protocol generates. Theoretically, this readjustment allows the protocol to peg the price of OUSD at $1 USD while distributing yield to token holders’ wallets. This creates an elastic supply of OUSD.
How the Origin Dollar Generates Yield
One way the Origin Dollar generates yields is by integrating with DeFi lending platforms that provide over-collateralized loans. They make money from the interest the platforms charge on loans. Lending Platforms, Origin Dollar currently works with include Compound and Aave.
Another way Origin Dollar generates yield is by owning stakes in Automated Market Makers (AMMs). AMMs build markets for synthetic assets such as stablecoins. Automated Market Makers make money by charging fees on transactions.
Origin Dollar automatically claims the bonus incentives DeFi protocols pay. The protocol automatically claims the incentives and converts them into OUSD.
Wrapped OUSD
Wrapped OUSD (wOUSD) is a non-rebasing version of OUSD that still yearns yield. The Wrapped OUSD earns yield at the same rate as regular OUSD.
The Wrapped OUSD is one of the first uses of the new EIP-4626 tokenized vaults linked to EIP-20 Tokens. The EIP-4626 is an ERC-20 extension that allows users to deposit and withdraw tokens and read vault balances. Users can convert OUSD to Wrapped OUSD.
The difference between Wrapped OUSD and OUSD is that in OUSD the wallet balance grows but the price remains stable at $1.00. In contrast, the wOUSD balance stays the same while the price grows. Hence, speculators could make money by wrapping OUSD.
Unwrapped wOUSD is easy because users hold wOUSD in their wallets like any other stablecoin. Hence, users can unwrap wOUSD.
Is the Origin Dollar a Bank?
I think the Origin Dollar (OUSD) resembles a bank. Notably, the Origin Dollar offers optional research similar to deposit research that protects assets.
Origin offers smart contract insurance from Nexus Mutual and InsurAce Protocol. These smart contracts cover losses caused by bugs and vulnerabilities in the Origin Protocol. For example, hackers trying to steal stablecoins through flash loan attacks.
Insurers can earn yield by providing coverage on the accounts. However, the Origin Dollar insurance, unlike bank deposit insurance, is optional.
What Value does the Origin Dollar (OUSD) have?
There is a little interest in the Origin Dollar, Coin Gecko named the Origin Dollar (OUSD) the 417th largest stablecoin on 1 September 2022.
CoinGecko gave the Origin Dollar (OUSD) a 99.46₵ Coin Price, a $48.376 million Market Capitalization, a $48.466 million Fully Diluted Market Valuation, a Total Value Locked of $49.119 million, and a $41700 24-Hour Trading Volume on 1 September 2022. They base those numbers on a 48.551 million OUSD Circulating Supply, a 48.551 million OUSD Total Supply, and a 48.551 million OUSD Maximum Supply.
In contrast, the Origin Dollar was CoinMarketCap’s 380th largest stablecoin on 1 September 2022. CoinMarketCap gave the Origin Dollar a 99.77₵ Coin Price, a $48.437 million Market Capitalization, a $48.404 million Fully Diluted Market Cap, and a $5737,575 24-Hour Market Volume on 1 September 2022. They base those numbers on a Circulating Supply of 48.551 million OUSD, and a Maximum and Total Supply of 48.551 million OUSD.
I think the Origin Dollar is an interesting method of speculating on stablecoins. I consider the Origin Dollar speculation because it is a derivative, a synthetic asset built from stablecoins. That creates danger because there is more than can go wrong, but it offers more rewards by adding an extra stream of revenue to stablecoins.
People seeking means of earning yield from stablecoins need to examine the Origin Dollar (OUSD).
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