Proposal: MIN + OPTIM Farm on OADA<>ADA Stableswap Pool
Overview:
In response to a recent proposal from the Minswap community, led by Smurfy, advocating for the integration of an OADA/ADA stableswap, the Optim DAO seeks to further this initiative by outlining and expanding upon the mutual benefits of collaboration. Smurfy’s proposal recommends allocating 500k ADA from the Minswap DAO wallet into the stableswap pair. To enhance the attractiveness of his proposition, the Optim DAO is prepared to match up to 250k ADA from its own liquidity, creating a total seeded TVL of the desired 500k ADA—250k provided by Optim DAO and 250k by Minswap DAO.
Additionally, institutional liquidity providers have shown interest in supplying the remaining liquidity to reach a pool size of 1 million OADA and 1 million ADA, contingent upon the provision of appropriate incentives.
This liquidity provider expects an overall APY of 4.8-5%, and our proposal aims to meet that target with the launch of a double farm for the OADA<>ADA stableswap pool, featuring both OPTIM and MIN rewards.
Based on existing comparisons—such as the DJED/USDM stableswap on Minswap—we estimate that the OADA/ADA pair could generate trading fees of ~0.1% APY and expect an additional 1% from ADA rewards. With this baseline of 1.1% APY, a combined 3.7% APY from OPTIM and MIN emissions would be required to meet liquidity providers’ expectations.
To achieve this, the Optim DAO is requesting that Minswap provide MIN emissions covering 3% of the required APY, while the Optim DAO would match 25% of this contribution with OPTIM emissions, bringing the total to 3.75% APY.
At the current ADA price of $0.3256 and a pool size of 2 million ADA (1 million ADA and 1 million OADA), the following contributions would be necessary:
MIN
((2,000,000 * 0.3256 ) * 0.03 ) = $19536
$19536 worth of $MIN tokens, or at current MIN price of $0.0131, 1491297.71 tokens.
Rounded up, we can say 1.5m MIN tokens.
OPTIM
((2,000,000 * 0.3256 ) * 0.0075 ) = $4884
$4884 worth of OPTIM tokens, or at current OPTIM price of $0.123, 39707 tokens.
Rounded up, we can say 40k OPTIM Tokens.
We believe this joint contribution is a fair and reasonable approach that provides the proper incentives for all stakeholders while ensuring the success of the double farm.
1.1 Project Overview: What is OADA and its Impact on Cardano?
OADA is the newest DeFi product from Optim Finance, designed to enhance yield opportunities, governance, and composability on the Cardano blockchain. As the first yield aggregation dApp on Cardano, OADA deploys ADA reserves into productive strategies via Algorithmic Market Operations (AMOs) to generate yield for users.
The OADA system aims to deliver an attractive yield product while also improving liquidity and network security as Cardano’s ecosystem evolves. As such, OADA plays a crucial role in the next phase of DeFi on Cardano, enhancing the resilience of the underlying layer-1 protocol.
Optim Finance is an experienced team that has been building on Cardano for nearly 3 years with a strong track record of delivering innovative DeFi products. Optim’s first product, Liquidity Bonds, have securely handled over 150M ADA in cumulative TVL over the past two years since mainnet deployment.
1.2 Token Utility and Current Holders
The OADA system separates ADA into two token components: OADA and sOADA.
- OADA: A stablecoin pegged to ADA, without staking rewards or governance functionality.
- sOADA: A non-pegged token that captures all the yield generated by the system.
This proposal specifically focuses on the OADA token, which can be minted 1:1 with ADA and is useful across the Cardano ecosystem for liquidity provision, trading, and as collateral in lending protocols. Users seeking to convert OADA back to ADA must swap it on the OADA/ADA stableswap on Splash, or other dexes as more pairs become available. There is no direct redemption mechanism. This is done to more fairly price the cost of exiting the system with slippage rather than tiered fees.
OADA maintains a narrow peg range of 0.99-1.01 through the Splash DEX AMO, which balances the pool using ADA reserves and freshly minted OADA. While the current holder count is modest (84), this is expected, as most circulating OADA is actively deployed in smart contracts for liquidity, or staked.
1.3 Why a MIN + OPTIM Farm? Benefits to the Minswap Community and Ecosystem
A MIN + OPTIM farm would enable the OADA/ADA pool to achieve the necessary APY to attract institutional liquidity, which in turn would drive volume and liquidity on Minswap and across the Cardano DeFi ecosystem.
As OADA adoption continues to grow, its role within the ecosystem will expand. The recent seeding of a 1M ADA OADA/USDM pair on Sundaeswap is a prime example, positioning OADA as a key asset in arbitrage across dex pairs. With Minswap’s existing infrastructure supporting multi-pair routing, the OADA/ADA pool could capture significant arbitrage volume from the start. This will become even more attractive as aggregators such as Dexhunter integrate double routing as well.
Moreover, Optim recently proposed the Cardano Catalyst Partner Program which is designed to accelerate OADA adoption across the ecosystem. The program democratizes access to the ADA TVL (currently 18.7m ADA and growing) for the sake of Catalyst voting power in upcoming Catalyst Funds. The Optim DAO is already engaged in partnership discussions with projects such as Fluidtokens, Clarity, and more.
DEXes participating in the program are required to provide at least 2.5 million OADA in liquidity, but the Optim DAO could be open to voting to adjust this requirement down for Minswap to make the pool more attractive. More details about the program can be found here.
If the DAO votes to lower the DEX requirement to make the proposed OADA/ADA pool on Minswap qualify, the Minswap DAO could then also consider qualifying for additional Catalyst votes with their own MIN/OADA pool, which would also help bootstrap arbitrage volume via Minswap DEX’s native multi-pool routing.
1.4 Tokenomics and Supply
OADA operates with a dynamic supply model, minted and backed 1:1 by ADA. As such, it doesn’t follow traditional tokenomics or have any vesting schedules. The supply adjusts based on the ADA reserves in the system, ensuring full backing and flexibility in response to market conditions.
1.5 Audit Information
The OADA core system has been audited by Anastasia Labs and is open-source. A bug bounty was conducted with no critical issues reported. For further details, the whitepaper, Github repository, and audit report are publicly available.
This proposal highlights the mutual benefits of establishing a MIN farm for the OADA/ADA pool, aligning incentives between the Minswap community, the Optim DAO, and institutional liquidity providers, while promoting deeper integration of OADA into Cardano’s DeFi ecosystem.
- Yes
- No