TEMP CHECK: Add support for Wrapped Origin Sonic (wOS) to Aave v3
Author: Peter from the Origin Protocol core team
Date: 2025-02-04
1. Simple Summary
In response to the Temp Check and recently passed ARFC proposal of deploying Sonic markets on Aave, this is a proposal for adding supply/borrow support for wOS on the Aave Sonic Instance.
2. Motivation/Background
Origin Sonic (OS) was launched in January 2025 and is an ERC20 LST that generates yield while sitting in your wallet by delegating S to a node operator. Similar to stETH, OS yield is paid out daily and automatically (sometimes multiple times per day) through a positive rebase in the form of additional OS, proportional to the amount of OS held.
Several LSTs trade below their peg due to DEX fees and slippage, and to reflect the time value of money. LSTs that consistently trade below peg effectively impose a hidden exit fee - certain LSTs often trade ~0.25% below peg, meaning it takes three weeks of staking to break even. This may be ok for long-term holders, but is terrible for users who plan to loop LTSs for additional yield. This was not the case for OETH or superOETHb, and will not be the case with OS.
Using OS on Aave will produce higher yield than other supported Sonic LSTs and have a near perfect S peg. The coming OS AMO will strengthen the peg, increase capital efficiency, and maximize yield. Our vision for OS is for it to become the most trusted LST for those seeking to use an LST for leveraged staking on Aave’s coming Sonic instance.
Obtaining OS is effortless, users can convert their S into Origin Sonic via any of the following methods:
- Minting on the Origin Sonic dapp
- Swapping on SwapX
- Swapping on Equalizer
wOS is a ERC-4626 tokenized vault designed to accrue yield in price rather than in quantity. When you wrap OS, you get back a fixed number of wOS tokens. This number will not go up - you will have the same number of wOS tokens tomorrow as you have today. However, the number of OS tokens that you can unwrap to will go up over time, as wOS earns yield at the same rate as standard OS. The wOS to OS exchange rate can be read from the contract (function number 16), or via the OS dapp.
Current exchange rate as of 2/04/25: 1 wOS = 1.00614219 OS
Security Considerations
OS was launched in January 2025 with 95% of its code forked from OUSD, which has been the basis of our other yield-bearing tokens OETH and Super OETH as well. This allows OS to inherit years of top-tier audits and a proven track record of securing hundreds of millions of dollars worth of underlying collateral. All OS audits can be found in the audits section of the OS docs. We have recently retained yAudit to look at our PRs as we code, and OpenZeppelin is also held on retainer to review 100% of the OETH and OUSD 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 6 hours.
We are in talks with Chainlink, Redstone, Pyth, and API3 about deploying an OS/S price feed, but the redemption rate of OS to S can also be used to derive the price of OS on chain (OS redemptions back to S are currently available and were available at launch). Origin Sonic likely qualifies for a Correlated-Asset Price Oracle (CAPO) based on similar LSTs that have qualified.
Performance
Origin Sonic has seen healthy growth since launching on January 14th of 2025. Proof of Yield tracks the distribution of each Origin Sonic rebase event and displays the compounded yield on an annualized basis each day. The current Origin Sonic TVL sits at $2.6m (5.2m S) with a native yield of 17.69% APY:
Origin Sonic is growing at a steady rate and is currently the number two spot by TVL on Defillama for LST projects on Sonic:
and is the number 11 spot for all protocols on Sonic:
There has been immense demand for borrowing S against OS for leverage looping on money markets since launch due to the high underlying OS APY, and since OS and wOS earn 2x Passive Points and 4x Active Points (8x total points) when used in Defi protocols.
Origin has managed to integrate and onboard Origin Sonic into a variety of protocol verticals, including vaults, perps, and money markets:
Benefits of listing Origin Sonic
Since 2021, Origin has streamed millions of dollars in stablecoin to Aave markets via OUSD strategies, generating millions in yield and significantly boosting Aave’s TVL.
Enabling lend and borrow support for wOS on Aave will provide a new market for OS holders and Origin Protocol users, and add a new platform for leverage looping S. This new Origin Sonic market would lead to additional increased TVL for Aave’s new Sonic instance, additional revenue to the Aave Protocol and DAO from active loans and liquidations, and will attract a wider user base due to Origin Sonic being significantly higher yielding over the other Sonic LSTs that have launched.
Proof of Liquidity (POL) and Deposit Commitments
While no incentives have been used within any Origin Sonic integrations due to the high native yield of Origin Sonic, the Origin Protocol team is open to providing seed liquidity to jumpstart the Origin Sonic market on Aave once wOS is onboarded. More accurate amounts will be discussed with the Aave team and the ACI and can be shared during the ARFC stage of the proposal process.
3. Useful Links
This is Origin’s fifth proposal to Aave, after proposing to add OGN as an Aave asset in 2021, proposing to add OUSD as an Aave asset in January 2023, proposing to add OETH as an Aave asset in September 2024, and proposing to add superOETHb as an Aave asset also in September 2024.
Additional relevant links:
- Origin Core Website
- Origin Sonic Website
- dApp
- Origin Sonic Analytics
- Gitbook
- Github
- Origin Sonic Contract
- wOS Contract
- Audits
- Blog
- Discord
- Telegram
4. Disclaimer
Peter is a member of the core Origin Protocol team. No additional compensation was received for publishing this proposal. This proposal is following the ACI Skyward process and framework.
5. Next Steps
- If consensus is reached on this [TEMP CHECK], escalate this proposal to the Snapshot stage.
- If the Snapshot outcome is YAE, this proposal will be escalated to ARFC stage
- Publication of a standard ARFC, collect community & service providers feedback before escalating proposal to ARFC snapshot stage
- If the ARFC snapshot outcome is YAE, publish an AIP vote for final confirmation and enforcement of the proposal
6. Copyright
Copyright and related rights waived under CC0.