A peer-to-peer commerce company known as Origin has announced a stablecoin called OUSD or Origin Dollars. It has reserves that leverage DeFi (decentralized finance). This would allow the balance to grow where it resides and no account or staking would be required. The co-founder of Origin, Matthew Liu, said that one prominent thing about DeFi is that only a small portion of the audience gets it because it has a higher barrier to entry. He added that they wanted to make DeFi a lot more accessible. Three big stablecoins on Ethereum will back OUSD one-for-one, which include MakerDAO’s DAI, Circle and Coinbase’s USDC and Tether’s USDT.
It is possible for the users to mint Original Dollar by depositing any of the three aforementioned stablecoins into the new app of Origin, or they can also by the stablecoin on Uniswap. Regardless of how they buy it, the Origin Dollar will just begin growing in their wallet and no further action will be required by the owner. Josh Fraser, the co-founder of Origin, said that people will be able to see their balance increase multiple times a day. On the backend, the deposits will be taken by Origin and they will begin yield farming them in various protocols, beginning with the DeFi money market Compound.
The returns that are generated in this way will be driven back into the OUSD, which will mint more OUSD and it will be proportionally divided into the wallets that contain it. The company will be able to boost the yield even further by using the tokens earned via liquidity mining and converting them into any one of the three stablecoins. These will also be supplied to the pool. At the time of this writing, the annual yield of these three coins on Compound is between 0.5% and just below 3%, even though this doesn’t factor in liquidity mining that can be tough to calculate.
In the beginning, the team believes that returns will be in single digits as their Compound deposits earn both fresh COMP and yield, but other pools will be added with the growth of OUSD. The three initial strategies to be used by Origin are growth-token mining, fees in automated market makers, and yields on deposits for lending. Fraser said that to get OUSD going, they would probably invest a few hundred thousand as a company. He said that with time, as they gain confidence, they would invest millions of dollars. He also disclosed that the company is speaking to different entities about investing in the pool and getting additional OUSD.
In 2017, $3 million was raised by Origin in a round led by Pantera and they sold about $6.6 million of their OGN token in 2018 in a sale on Coin list. OGN is used for giving people an incentive to switch, participate in the platform, and also entice other people to join. But, the question is why is the company creating a stablecoin? According to Liu, the OUSD fits into their broader version of peer-to-peer commerce because it removes any friction between spending and earning.