DEX AMO Risks

Currently, the DEX AMO is interfacing solely with the Splash OADA/ADA stableswap pool. As a new deployment, this involves some degree of smart contract risk. However, this perceived risk is expected to decrease over time as the DEX undergoes rigorous testing in production environments. It is important to note that the team behind Splash and its v1 predecessor, Spectrum, has established a strong reputation within the ecosystem for developing robust and resilient applications. The stableswap contracts have been open-sourced and fully audited, further enhancing their credibility and security.

Despite these assurances, the system remains exposed to potential changes in fee parameters by the Splash DAO. Such changes could result in small principal losses for the system. To mitigate this risk, the Optim DAO has accumulated a significant position in Splash and plans to be heavily involved in its governance process. This involvement allows Optim DAO to influence decisions and safeguard the interests of the OADA system.

By actively participating in Splash DAO governance, Optim DAO aims to ensure that any changes to the fee parameters are in the best interest of the ecosystem, minimizing potential losses and maintaining the stability and profitability of the OADA system. This proactive approach demonstrates a commitment to robust risk management and strategic involvement in key governance processes.

While the DEX AMO's current reliance on the Splash OADA/ADA stableswap pool introduces some smart contract risk, the proven track record of the development team and the strategic governance participation by Optim DAO significantly mitigate these risks. This careful balance of innovation and risk management underscores the resilience and forward-thinking nature of the OADA ecosystem.

You can read a technical specification of the OADA system found at the the following link: https://github.com/OptimFinance/public-documents/blob/main/The_OADA_System.pdf

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