XVS DEX Liquidity Optimization with Yield Forwarding
Author: Peter from Origin Protocol
Submission Date: 6/27/25
Simple Summary
Hello, Peter here again, core team member from Origin Protocol. This is a proposal for Venus to use $40k of the ETH from the treasury and/or from the ETH/XVS pool on Uniswap and $40k of XVS to deploy an OETH/XVS pool on mainnet and a superOETH/XVS on Base with Yield Forwarding enabled ($20k ETH/$20k XVS on mainnet, and $20k ETH/$20k XVS on Base). Yield Forwarding permits the yield generated by the OETH in a pair and superOETH in a pair in a DEX pool to be re-directed to a new address fully controlled by Venus.
Motivation
We have noticed that Venus has XVS supported across multiple chains, some of which have pools paired with ETH. We’ve also noticed that Venus has unused ETH sitting in the treasury. Enabling Yield Forwarding for an XVS pool will allow Venus to put the idle, unused DEX liquidity to work, which will both help grow the Venus treasury and deepen the XVS liquidity across multiple chains.
Specification
Breakdown of OETH
Origin Ether (OETH) was launched in May 2023 and is an ETH mainnet ERC20 LST that generates yield while sitting in your wallet. OETH is pegged to ETH 1:1 and, similar to stETH, has its yield paid out daily and automatically (sometimes multiple times per day) through a positive rebase in the form of additional OETH, proportional to the amount of OETH held. OETH earns yield from 3 sources:
- DVT direct staking through SSV/P2p
- The Curve AMO
- Those opted-out from receiving the yield - any OETH sitting in smart contracts or smart contract wallets by default is foregoing the yield (except for those who have opted-in, or contracts with YF turned on) in exchange for the DEX emissions to those opted-in, leading to a boost in yield
There are several OETH/ETH pools currently deployed across multiple DEXs, with the largest OETH pools on Curve and Uniswap. OETH redemptions back to ETH are currently available via the OETH dapp. The OETH ARM provides instant redemption liquidity when it is available in the contract.
OETH contracts are continuously audited - all audits can be found in the audits section of the OETH docs. yAudit has been retained to look at our PRs as we code, and OpenZeppelin is also held on retainer to review 100% of the OETH smart contract changes. Origin maintains an active bug bounty with rewards ranging in size from $100 OUSD for minor issues to $1,000,000 OUSD for major critical vulnerabilities. The bug bounty program is currently administered by Immunefi, where Origin maintains a median resolution time of 7 hours. OETH price oracles are available through Chainlink, Tellor, and Dia.
OETH is a simpler version of superOETHb on Base, and is also a core component of superOETHb. SuperOETHb is already supported on Venus as collateral via the Venus Base instance.
Breakdown of Yield Forwarding
Prior to 2025, if a user paired a token with OETH or superOETH in a DEX pool, that pool address was automatically opted-out from earning the OETH/superOETH yield via rebase. As mentioned above in OETH yield source #3, this has led to a yield bonus to all OETH/superOETH holders.
With Yield Forwarding enabled, rather than being given up to those who have opted-in for yield, the yield generated from the OETH/superOETH sitting in a DEX pool can now be redirected to any address that the Venus team, DAO, and community chooses - in addition to earning the DEX trading fees. Simply put, OETH/superOETH Yield Forwarding puts the ETH in a DEX pool to work, where a standard ETH pair would otherwise only earn trading fees.
There are two main use cases for Yield Forwarding, for which we have given the name Treasury Booster and Pool Booster:
Treasury Booster
In addition to receiving the pool trading fees, the yield from the OETH or superOETH in the OETH/XVS pool or superOETH/XVS pool is sent directly to the Venus DAO treasury address, to be used as the core team, DAO, and community best sees fit. This can be done on any DEX (with the exception of a small few), so long as OETH/superOETH is part of the token pair.
Pool Booster
In addition to receiving the pool trading fees, the yield from the OETH or superOETH in the OETH/XVS pool or superOETH/XVS pool is sent back to the DEX as an incentive bribe on the pair, creating a self-funded auto-bribe on the DEX’s emissions flywheel. This can be done on any DEX with a gauge incentive system, so long as OETH/superOETH is part of the token pair.
Here is a simple breakdown of the Treasury Booster and Pool Booster:
Yield Forwarding Fees
The yield displayed on the OETH Analytics page and on the superOETH Analytics page is the yield that Venus will earn from OETH or superOETH Yield Forwarding regardless of volume, in addition to the DEX trading fees. There are no additional fees charged to Venus to use Yield Forwarding. The only fee is Origin’s standard 20% performance fee on the yield generated by OETH/superOETH. This fee is already accounted for in the historical OETH and superOETH yield numbers shown on the analytics pages.
A numerical example of an OETH/XVS $1m pool can be found here:
Steps to setup yield forwarding
The process of setting up Yield Forwarding for Venus is simple:
- Venus will deploy an OETH/XVS pool and superOETH/XVS pool on any preferred DEX
- Venus will decide on if the destination address for the OETH/superOETH yield should be:
a. An Venus treasury wallet
b. Sent back to the DEX as a bribe on the pair (if the pool is deployed on a DEX that supports bribe emissions)
c. Sent to another contract address for a use case not named in this proposal - Origin will put the DEX pool address through Origin Protocol governance and timelock to enable yield forwarding on the pool, with the destination address set as the address from step #2
Venus can change the destination address that the yield is forwarded to at any time, pending the Origin governance timelock.
OETH/XVS Pool Deployment Configuration
It is ultimately up to the Venus DAO, community, and core team to decide on the configuration of the OETH/XVS and superOETH/XVS pool. We recommend full range pools, so that no rebalancing or active management will be needed, but Yield Forwarding will work with any style of pool configuration.
We envision volume on an OETH/XVS pool and superOETH/XVS pool to be similar to the ETH/XVS pool, since both OETH and superOETH are pegged 1:1 with ETH. As more projects pair with OETH and superOETH, volume may even increase on the OETH/XVS and superOETH/XVS pools as there would be more arbitrage opportunities.
XVS Yield Forwarding On Other Chains
In addition to utilizing Yield Forwarding on the Ethereum mainnet and Base, Venus can use Yield Forwarding to put idle DEX assets to work on the Sonic and Plume chains, following the same 3 steps above. To proceed on Sonic, Venus must deploy a pool on a DEX paired with OS (OS is 1:1 with S). To proceed on Plume, Venus must deploy a pool on a DEX paired with superOETHp (superOETHp is 1:1 with ETH). The first pools deployed with Yield Forwarding were deployed earlier this year. Many of the pools deployed with Yield Forwarding enabled can be seen on the Origin Protocol governance forum.
Origin invites the Venus community to consider this proposal for creating OETH/XVS and superOETH/XVS DEX pair with Yield Forwarding enabled and welcomes any suggestions in this direction. Origin also looks forward to the community to suggest:
- DEX to deploy OETH/XVS and superOETH/XVS on
- Pool configuration
- Amount of liquidity to supply to these pools
- Other chains to enable XVS yield forwarding on
Relevant Links
OETH Dapp
OETH Docs
OETH Analytics
Yield Forwarding
Yield Forwarding Thread
Pool Booster
Current Yield Forwarding Pools