An Analysis of oUSD, the Credit Token Launched by OPNX

Source: 0xLoki tweet


  1. OPNX issues a credit stablecoin (oUSD), or a gambling chip, and oUSD is used for settlement on OPNX
  2. Users can exchange oUSD for USDT at a 1:1 ratio
  3. Users can collateralize BTC/ETH on the chain to mint oUSD, so that users’ actual assets are still retained on the chain, avoiding the risk of misappropriation like FTX. If a user’s oUSD is positive (such as a profitable contract), they can exchange it for USDT at a 1:1 ratio

Firstly, the oUSD issued by OPNX is a credit token, not a stablecoin. Here is a detailed explanation:

Let’s imagine a market where people can exchange various collectibles, such as stamps or rare coins, using a special currency called “oUSD”. This market is the OPNX platform, and the collectibles represent different cryptocurrencies. In this context, oUSD is designed to solve three key problems.

Problem 1: Some collectors (lenders) do not want to participate in the market because they do not want to entrust their valuable collectibles (cryptocurrency collateral loans) to the market organizer (platform).

Problem 2: Market organizers (exchanges and lending platforms) are unwilling to support certain activities, such as lending collectibles to traders who want to buy but cannot afford them. Such behavior has caused many market organizers to suffer losses (bankruptcy) in the past.

Problem 3: Some traders want to use all their collectibles (non-stablecoins, such as BTC, ETH, and OX) as collateral for trading, rather than relying solely on a certain type of stablecoin.

Based on this situation, oUSD, as a new type of market currency, aims to provide people with a more flexible and secure way to exchange collectibles (cryptocurrency) and solve problems caused by the limited amount of stablecoins provided by lenders or market solvency risk.

Phase 1: Users can purchase oUSD with USDT and trade collectibles with non-stablecoin collateral. They can also pay or receive profits and losses with oUSD, and the interest rate is determined by the votes of OX pledgers.

Phase 2: Users can deposit EVM-compatible assets into smart contracts, which will be displayed as collateral value on OPNX without the need for direct platform participation. In addition, users can pledge oUSD to the treasury to earn interest and obtain benefits from the collateral liquidation of the OPNX exchange.

Overall, oUSD is an innovative market currency designed to provide users with a more flexible and secure way of trading cryptocurrencies, and to address key issues related to credit, margin, and collateral lending in the cryptocurrency field.

The design is quite interesting, but there are several potential risks:

1/ The collateral for oUSD should not include some strange assets (such as $OX), otherwise it will become UST

2/ There needs to be an effective mechanism to prevent the backend from issuing oUSD, otherwise there is a possibility of running away with the USDT in the PSM

3/ Will this mechanism make exchanges more motivated to become users’ trading counterparts?

A simpler way to understand is that oUSD is like a casino chip. In other casinos, people gamble with cash, but here at OPNX, everything is exchanged for chips before gambling. The exchange for chips not only supports cash, but also supports gold, stocks, refrigerators, televisions, and washing machines. They are all placed at the entrance of the casino under the watchful eye of the security guard, and settled and taken away after gambling.

Another benefit is that these collateral assets can earn interest, just like cash in a bank account or renting out refrigerators, televisions, and washing machines.

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