The launch of Boosted OMM
Omm launches bOMM, the first vote-escrowed token on the ICON Network.
The Omm money market now rewards those aligned with its long-term success. Boosted OMM gives users the ability to lock up their Omm Tokens for up to 4 years. The longer they lock it up for, the more rewards and voting power they receive.
Learn more about the token economics and rationale behind Boosted OMM, and how it was added to the UI while minimising complexity.
What is Boosted OMM?
Boosted OMM is a vote-escrow token economics model, similar to Curve. It's a way to align protocol rewards and voting power with those most invested in Omm's long-term success.
Boosted OMM gives people the ability to lock up OMM, the Omm governance token, for as little as 1 week — or as long as 4 years.
A lot can happen in 4 years, especially in crypto. So why would anyone do it?
The longer people lock up OMM, the more bOMM they hold. bOMM is a non-transferable token that gives them voting power and "boosts" their ability to earn OMM by using the Omm protocol.
People earn OMM by:
- Lending to/borrowing from the Omm money market
- Supplying OMM liquidity on the Balanced exchange
- Locking their OMM
Until the release of bOMM, their earning potential — and voting power — was based only on the size of their investment. Those with the most, benefitted the most.
Boosted OMM is a way to level the playing field for the average user. The system no longer rewards people based on how many tokens they hold, but on how long they intend to hold them for. Those who are willing to lock their tokens for 4 years believe in the long-term success of the protocol, so Boosted OMM allows them to benefit in the form of increased rewards and voting power.
1 OMM locked for:
- 1 week = 0.0048 bOMM
- 1 month = 0.0208333 bOMM
- 3 months = 0.0625 bOMM
- 6 months = 0.125 bOMM
- 1 year = 0.25 bOMM
- 2 years = 0.5 bOMM
- 4 years = 1 bOMM
Depending on the size of someone's position and the amount of bOMM they hold compared to everyone else, they'll receive 0.4x – 2.5x more OMM than the standard market rate.
To learn more about bOMM and how the rewards are calculated, take a look at the Boosted OMM documentation.
The Boosted OMM UI
Omm was designed to be an "open money market" – accessible to everyone who wants to use it. A complex change like bOMM threatened to make a simple product feel too advanced.
Previously, OMM holders staked their tokens indefinitely to receive voting power and staking rewards. When they wanted to use their OMM, they just had to wait 3 days for it to unstake. It was straightforward, no way to go wrong.
While similar, bOMM provides additional utility. It requires you to set a lockup time, and should include information like your reward boost(s) and voting power. To make the UI as simple and helpful as possible, the Boosted OMM functionality was integrated with mostly subtle changes, and solves several UX problems caused by smart contract limitations.
You can preview the UI on the Rewards and Vote pages in the Omm demo:
Two pages, two bOMM interfaces
bOMM affects your earning potential and voting power, so users can lock up OMM on both the Rewards and Vote pages of the Omm app. While the functionality is the same on both pages — you lock up OMM — it's not repetitive because they highlight different details in each context.
On the Rewards page, it's important to highlight the daily rewards earned by holding bOMM, and the boost for each activity. If you participate in multiple markets or liquidity pools, you'll see a range that shows your highest and lowest boost for each.
On the Vote page, it's important to see details related to voting power – both in bOMM and ICX value. Omm was built on the ICON blockchain, and the ability to use ICX to participate in its governance system is a core utility of OMM. Because it's ongoing instead of the occasional Omm proposal, the voting power in ICX value is the main highlight. Your bOMM is shown next to the panel heading, just as it in on the Rewards page. And you can view the total bOMM at all times from the tooltip next to 'Total voting power'.
Dynamic values to aid decision-making
Most DeFi protocols make it difficult to preview how a change will affect your return on investment. Many users rely on their own calculations to work out how a transaction will impact their position. But as Steve Krug would say, "don't make me think". With Omm, we always try to make it easier.
When you lock up OMM, your bOMM, rewards, and voting power will adjust as you use the slider, and when you choose a different time period. You'll see your boost (or boost range) for markets and liquidity pools you've participated in, and the amount of OMM you can expect to earn daily just for locking yours up.
After you lock up OMM, you can compare your interest rate for each market and liquidity pool against the average rate.
- Liquidity pools: Go to Rewards > Liquidity pools and compare the rate between 'Your pools' and 'All pools'.
- Markets: Go to the Home page, turn on the OMM toggle, then compare the rate between 'Your markets' and 'All markets'. Or, under the 'All markets' view, expand a market you participate in. The top level rate is the average, and the secondary level is your rate:
Using design to solve smart contract limitations
In a decentralised system, users often have to deal with limitations. Automated processes that allow for minimal user interaction would be more efficient, but they are more difficult – they're usually a result of centralisation.
For example, locking up OMM isn't enough to receive your boost. Applying the boost is a separate function in the smart contracts, so unless further action is taken, you'd still earn the same market and liquidity rewards as you did previously.
You can apply the boost in several ways. One is to interact with a market or liquidity pool you participate in, but that only adjusts your boost for that specific activity. The UI could indicate if your boost is active for each activity, but that would introduce more complexity to the UI and code. It also gives users another thing to think about, and would cause frustration if it escaped their attention.
You can apply the boost universally by claiming Omm Tokens. So the solution could've been a message telling people to claim rewards after they lock up OMM, but people have a habit of not paying attention. So instead, a final step was added to the lockup flow. This modal appears after the lockup transaction has been confirmed:
Another example: after the lockup period is over, there's no automatic method to send those tokens back to your wallet. You need to claim them first, and you can't lock up more OMM until you do.
Instead of trying to overdesign the solution, the existing UI only needed some subtle tweaks:
For a complex change like bOMM it’s important to be adaptable, so we’ll monitor use and community discussions closely to make sure the interface is as fluid and helpful as possible.
About the upgrade
The bOMM upgrade was completed at 12pm UTC on July 12, following months of preparation and an unanimous vote of approval by 42.82% of the Omm community.
The app and smart contracts were unavailable for 8 hours while the upgrade took place. Now that operations have resumed, users are prompted to migrate their staked OMM to the locked model when they next sign in.
As of publishing, almost 14 million bOMM is held by 492 wallets. 23.6 million OMM has been locked, or 16% of the total supply. That gives an average lockup time of 2.35 years, although 40% (in wallets and volume) chose to lock for the full 4 years.
With the bOMM upgrade now complete, and discussions ongoing to reduce the amount of new OMM added to circulation, Omm can focus on its cross-chain goals.
Omm currently serves the ICON blockchain, but it was designed to become one of the largest multi-chain money markets with sustainable earning opportunities.
If you're new to Omm, learn how to get started with one of its 3 stablecoin markets:
- Stably USD (USDS): a centralised stablecoin, best for people new to crypto
- ICON USD Coin (IUSDC): USDC wrapped for use on ICON, best for investors who hold USDC
- Balanced Dollars (bnUSD): the stablecoin of the ICON ecosystem
For any questions, join the Omm community on Discord.