In my previous story, I shared about how Invictus is much more interesting than OHM and TIME because of dynamic rebasing and the higher bond discount but left something really important out.
With OHM, a good portion of the treasury is made up of small cap stable coins like FRAX and LUSD. In addition, about 20% of the treasury is in wETH and only slightly more than half in DAI (which is backed by other stable coins and ETH). This inherently mean that the dollar value of OHM that is backed at any point in time varies due to the price action of ETH.
This is worse with TIME as over half of the dollar value held by the treasury is in the TIME-AVAX LP and a significant portion in wAVAX. The combination of MIM and TIME-MIM LP accounts for less than 30% of the treasury’s asset. This leaves the dollar value of the treasury asset way too reliant on the value of AVAX (which had been on a decline since its peak at ~$140 a week ago.
You may wonder why all this matter? The amount the treasury have determines the runway the treasury have. The runway is the duration the protocol can continue giving out the promised crazy APY% to all the (3,3) folks. If ETH or AVAX crashes today (although highly unlikely, even if it does, the price of OHM and TIME will probably crash as well) the runway can see a decline as well. Even though the documentation for OHM mentioned that when there is a decrease in stakers due to a selloff, the APY will drastically increase such that those that hodl will eventually breakeven or profit, however, this does not consider the situation of a market selloff where ETH tanks as well.
With IN, the treasury is mostly backed by the two largest cap stable coins (USDT and USDC). Ignoring the fud around Tether, a highly liquid and stable treasury makes it more “immune” to the volatility of the market as the runway should not be affected.
At the time of writing, they added the mSOL bond a day ago which I can understand. mSOL is generating revenue for the protocol from the yield staked at Marinade Finance. Currently mSOL accounts for less than 4% of the current treasury’s worth and the discount given is always lower than the other bonds offered. This should help keep the mSOL held by the treasury at a much lower level than wETH with OHM and wAVAX with TIME which I personally think is much better if we want to be the reserved currency built on Solana.
I am all IN. Are you?