The Friendly Saver from Outer Space

Our investment in Orion Money
by
Or Harel
October 1, 2021

Today, if you want to invest your money in the traditional saving solutions offered by banks, your Return On Investment (ROI) will yield a miserable APY in the low single-digit.
Then came Decentralized Finance (DeFi). 


DeFi’s infancy started around 2017 with lending and borrowing services popularized by AAVE and Compound offering double-digit APYs for the first time in decades. If that wasn’t enough, you could have been paid to borrow different types of cryptocurrencies (yes, really).

AAVE Lending & Borrowing rates 2020.  E.g. borrow MATIC at 5.85 APR with 22.67 APR
AAVE Lending & Borrowing rates 2020. E.g. borrow MATIC at 5.85 APR with 22.67 APR

"Fast-Growing"

A year ago, in September 2020, DeFi market cap was a “measly” $15B.

DeFi Marketcap Sep 20' - Sep 21'
Yes, all the way down and to the left

One year later, DeFi is coming into its adolescence and like (the opposite) of most teenagers, it’s a money-yielding monster.


As of September 2021, the DeFi market cap is reaching $137T*. That’s 10,000x compared to previous year’s $15B. The lending and borrowing market cap alone, is now reaching $16.5B.

In DeFi, just like with teenagers, to get a “good” ROI, you often have to deal with volatile, unpredictable returns, a messy user interface few can operate, and oftentimes an expensive transaction cost for each interaction.


Analogies aside, today, the majority of stablecoins saving solutions offer unappealing, unpredictable, and blockchain-specific yields. 


Smart contracts risks and complicated UX deter the main street investor. 

Moreover, the few solutions offering on-off ramping of fiat-to-crypto are mostly centralized, expensive, and too technical for the average user, who just wants to dip his toe in DeFi's money markets.

Along Came Orion

Orion Money is a decentralized, cross-chain, multi-stablecoin bank offering best-in-market stable interest rates in a seamless and frictionless manner. Its, ambitious/audacious, comprehensive ecosystem is backed by well thought out solutions conceptualized by the team. 

Orion Money's solution consists of three main products directed to solve the aforementioned problems: Orion Saver, Orion Yield and Insurance, and Orion Pay

Working Products

Orion Saver is a three-tier program: Earth, Station, and Moon which yield 12%-25% APYs, depending on the amount of ORION tokens staked. 

It currently supports six stablecoins: wUST, DAI, USDT, USDC, FRAX, and BUSD.



Today, Orion Saver Ethereum is already running. Its launch on BSC, Polygon, Terra and Elrond is planned for this quarter.


In August 2020 Orion Saver completed its private farming, reaching $70M TVL in just 3.5 days (exceeding its already ambitious goal of 21 days).

The Builders

The project is led by Vol Pigrukh and Kos Chernysh, who previously founded Profitero, an analytics startup that grew into a 300-employee company. During our conversations with the team, we were impressed with their technical knowledge, comprehensive thinking, and fast execution.


The Road Ahead

Orion Yield & Insurance is planned to provide high-yield savings and use liquidity to invest in diversified strategies. Stakers will receive a share of extra yield generated in exchange for underwriting insurance for depositors. [Projected Date: Q1-Q2, 2022]

Orion Pay will be an ecosystem where stablecoin depositors can easily spend their earned interest. The team is researching implementation options such as fiat on-off ramp solutions, crypto-to-fiat direct payments, crypto-to-fiat subscription-based services, and crypto debit cards. [Projected Date: Q2-Q3, 2022]

But Wait, There is More

Tokenized Derivatives will aim to develop tokenized versions of stablecoin deposits (e.g., oUSDT, oBUSD, etc.) on Orion Saver, and further develop liquidity options for them to be traded on and off Orion Money.


Orion Loans to complement the suite of dApps within the ecosystem, with a potential roadmap for self-paying loans and no-liquidation loans.


Protocol-Specific Optimizers aim to develop optimizers for specific protocols within Terra, where applicable and feasible (e.g., Anchor Borrow + Earn optimizers, Luna staking optimizers, liquidation protection mechanisms, etc.).

The Importance of SITG

The famous scholar, investor, multi-best-seller, and man who coined the term “Black Swan”, Nassim Taleb eloquently explains in his book, Skin In The Game, the importance of having a stake for risk management. “The phrase “skin in the game” is one we have often heard but rarely stopped to truly dissect. It is the backbone of risk management”. “Never trust anyone who doesn’t have skin in the game. Without it, fools and crooks will benefit, and their mistakes will never come back to haunt them.


One of the most important features of DeFi decentralization with dApps (in general and specifically) is that they are Open Source and thus open for everyone to see and copy. This “copibility” capability is called Money Legos in crypto jargon. 


In the digital world, the Switching Cost or friction involved in moving from one service to another is only a few clicks. 


Two of the leading decentralized exchanges (DEX) are essentially a copy of one to the other. Uniswap, a pioneer in the DEX landscape, was Forked or “cloned” into Pancakeswap. At the time, a substantial number of users moved from Uniswap to Pancakeswap, to enjoy virtually the same user experience but with better ROIs.


Patents were invented for that exact reason, to prevent other entities from “stealing” one’s hard-worked Intellectual Property. For brevity’s sake, I’ll just say that patents don’t apply in the same way for code - so once it’s shared it can be copied.


Combating Copycats

Staking alleviates this problem by asking users to put their SITG by locking their assets in a “digital safe”, which can’t or disincentivized to be opened for the taking period.

Now that we know what and why staking is important, let’s examine...


Three types of stakeholders within the protocol

First are the dApps users across the multitude of dApps built across Orion Money (e.g., stablecoin depositors on Orion Saver dApp).

Investors and speculators: ORION tokens ($ORION) holders from exchanges, accumulated through farming or airdrops.

$ORION stakers: Users who stake ORION tokens receive staking rewards and participate in the protocol’s governance.

Counterbalance

The recent smooth launch of Orion Saver is a significant milestone for the progress of the protocol. The two main potential pitfalls, which are non-specific to the DeFi space, are poor team execution and new crypto regulations.

Factoring in the extremely fast and robust execution and passing of three successful auditing tests, this seems unlikely. Nevertheless, the added complexity of bridges between blockchains can pose additional security risks and potentially offer an attack vector. 

The aspirational ecosystem suggested by Orion consists of many moving parts and even the best audit can’t cover all edge cases. The very nature of smart contracts is that they are supposed to be immutable. Thus, it’s complicated and in some cases impossible to fix a bug.

All Together Now

Orion Money is a well-thought-out project.

It consists of a comprehensive ecosystem, overseen by an experienced and fast executing team.

It has market-leading partners, multiple incentives, and risk-mitigating disincentive mechanisms. 

It also has a functioning, cross-chain interoperability, and high and stable APYs. All inside a Total Value Locked that just keeps growing.

As DeFi continues to evolve and grow out of the quirkiness of adolescence, its potential starts to appear more and more obvious.

Someday, faster than most expect, the growing pains will dissipate.

The chasm between early adopters and the main street investors will shrink, and a prosperous DeFi will emerge that can blossom into a big, beautiful, white swan.


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