AMOs
"Where does the yield come from?"
Last updated
"Where does the yield come from?"
Last updated
The OADA system utilizes multiple AMOs [Algorithmic Market Operations] to generate system profits. AMOs autonomously mint and burn OADA to execute a programmed strategy. Allocation of system reserves and invocation of the majority of AMOs requires a signature of one of the system operators referred to as a Controller. Controllers are bots that perform system operations. It is a governance-delegated position, that possesses no custody of the assets, in all situations aside from a potential system exploitation.
The Splash DEX AMO is a key piece of the OADA system that maintains the OADA/ADA peg and generates system profits. The DEX AMO is able buy, sell, mint, and burn OADA, as well as add and remove liquidity from the pool. When users buy and sell OADA in the pool, the DEX AMO algorithmically executes these operations to regain stable peg and profit from the arbitrage opportunity.
The Stake Auction AMO handles all operations related to ADA stake. At the end of each Epoch, the OADA system un-deploys all ADA reserves from other strategies and deploys them into the Stake Auction. At this point, bids that were made on the stake power of ADA reserves throughout the epoch are filled and the ADA is staked to the bid owner's key.
The Staking AMO handles the accounting of the exchange rate of sOADA to OADA. As the other AMOs provide yield to the system, they funnel into the Staking AMO where it distributes profits to sOADA holders. The Staking AMO accounts for the DAO fee cut, currently set to 20% of total system profits.
Other AMOs are planned for future developments such as the Lending AMO, Borrow AMO, and more.