[Request for Feedback] Who should provide liquidity for the Pendle stOBOL integration?

General Discussions
1

We’re almost done with our first DeFi integration.

Thanks to the work led by DAMM Finance and funded through the grants program, the stOBOL Pendle integration is nearly complete. Audits are underway, contracts are good to go but we’re now facing the final bottleneck: providing initial liquidity.

Pendle requires ~$50–100k of liquidity in the stOBOL market to activate the pool and make it tradeable and visible in their UI.

We see two paths forward :

1. Community-provided liquidity

In this case, an OBOL token holder (or multiple) would deposit funds into the Pendle pool.

The Obol Association would not directly participate, avoiding any reward extraction.

This is our preferred option, but it comes with challenges:

  • Most top delegates don’t hold large OBOL balances
  • It’s difficult to identify whales on-chain or reach them directly
  • We’d love help from the community if you know of holders who might be interested

There are several benefits of participating as an LP :

  • No impermanent loss (in OBOL terms) if liquidity is held until maturity
  • Pendle LP incentives: While modest, LPs receive PENDLE rewards through Pendle’s veToken voting mechanism (similar to Aerodrome). Being an early LP could even earn outsized votes + swap fees in early epochs.
  • Swap fees: From traders speculating on the yield direction of stOBOL
  • Intangible value: Supporting OBOL’s first DeFi integration brings brand visibility and helps boost token utility long-term

2. Obol Association-provided liquidity

If we don’t find external liquidity providers, we’re prepared to step in and deposit the required amount ourselves.

However, we want to be fully transparent about this as in this case, all associated rewards and benefits outlined above (e.g. Pendle yield, swap fees, PENDLE emissions) would accrue to the Association.

We’re seeking community feedback on whether this would be an acceptable solution. If the rewards turn out to be substantial, we’d also like suggestions on how those funds could be transparently used to benefit the Collective. The goal is not for the Association to extract passive yield, but to ensure those rewards are reinvested meaningfully into the ecosystem, potentially through community initiatives or treasury-aligned efforts. Please share your thoughts below.

Next Steps

We’re currently gathering feedback from delegates and community members.

Please drop your thoughts below, and if you know any token holders who could support this, we’d love to reach out.

Thanks as always!

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2

Not sure what amount of rewards would be expected, but does not sound very significant.
I’d be more curious about downside potential/risks, but not really worried.
I believe it would be very valuable to have a first DeFi integration and most other protocols also provide liquidity (incentives), so I don’t see a problem either way.
Appreciate the early gathering of feedback!

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Thank you for the detailed update and for the transparency in outlining the options.

We agree that encouraging community-provided liquidity should be the primary approach. However, to avoid delays in activating the pool and to ensure a successful first DeFi integration, it seems reasonable for the Obol Association to act as a fallback liquidity provider if external sources are not secured.

In that case, we would suggest that any rewards generated from Association-provided liquidity to be redirect back to the ecosystem, using the grants program. This would ensure that any proceeds directly fund initiatives that strengthen the Obol Collective, supporting builders, contributors, and future integrations.

This approach offers a good balance between progressing with the integration without delay while maintaining alignment with the Collective’s long-term objectives.

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Thank you for this transparent and thoughtful request for feedback. The upcoming stOBOL integration on Pendle is an exciting milestone, and it’s great to see the careful consideration being given to this final step.

After reading through the options and the discussion, I’d like to voice my support to prioritize speed and certainty first, while simultaneously exploring the ideal long-term strategy for the Collective.

Obol Association-provided liquidity

To ensure we don’t lose momentum and if no community member is providing this, I support the Obol Association providing the initial $50k - $100k in liquidity. This is the most pragmatic solution to guarantee the pool launches on time and that stOBOL becomes immediately productive in DeFi.

During this initial phase, I agree that any and all rewards the Association’s position accrues (Pendle yield, swap fees, PENDLE emissions) should be directed to the Obol Grants Program. This ensures the entire ecosystem benefits while the market finds its footing.

The Long-Term Strategy: Exploring DAO-Owned Liquidity

The Association’s action should be viewed as a temporary bridge. It gives the community valuable time to explore a more independent, and long-term goal like having the Obol Collective build its own LP position from its own treasury.

As the DAO, if ready, adds its own liquidity over time, the Association could then gradually withdraw its initial capital, having successfully kickstarted the pool.

This path, however, depends entirely on the status of the Collective’s treasury. Therefore, it would be great for the community begins to explore the following:

  • Is there an established Obol Collective treasury, and does it hold capital that could be deployed for such a purpose?
  • If the treasury has funds (or once it does), a formal governance proposal could be drafted for the Collective to deploy its own capital to become a significant, long-term liquidity provider in the stOBOL pool.
  • Develop a Treasury Flywheel: A successful deployment would naturally lead to a broader treasury management strategy. The goal would be to use the yield from the DAO’s LP position to fund grants, compound its holdings, and support other ecosystem initiatives, creating a self-sustaining revenue flywheel for the Collective.

In short, let’s use the Association’s resources to act decisively now, while simultaneously beginning the important work of exploring how our DAO can become a financially independent and productive stakeholder in its own ecosystem.

Congratulations on this milestone, and I look forward to the launch!

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I believe the team should provide liquidity themselves, it would be faster and more professional

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I agree with @kpk’s overall framing here. Encouraging community-provided liquidity should absolutely be the primary strategy. But to avoid delays and ensure the success of Obol’s first major DeFi integration, I think it’s reasonable for the Obol Association to act as a fallback liquidity provider if external sources don’t materialize in time (which I wouldn’t expect them to).

It’s important that Obol doesn’t become the permanent liquidity provider, but stepping in early to seed and de-risk the pool is strategic, especially to support initial integrations and allow YT/PT experimentation to take off.

To get things off the ground, I’d support deploying a modest amount of treasury-owned stOBOL into Pendle pools—ideally paired with SY-stETH or SY-aETH where there’s already traction. This would help create initial depth, signal commitment, and make it easier for community LPs and downstream integrations to engage with confidence.

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7

I will support any of the options. If there is a player with big money, that’s good.
If the Obol Association makes money, that’s also good. Is it bad that the Association will be rich? I think it’s good.
But I am against grants for the sake of grants. I am only for the necessary grants. There are still many exchanges where it will be necessary to provide liquidity and support for the token.
This also requires funds. So let the association grow rich and expand its capabilities.

1 Like
8

Thank you for this update. We are excited to see the first potential DeFi integration for the Obol token, and particularly as stOBOL is a product focused on governance we think it’s even more relevant.

We agree with other delegate’s feedback on the intuitive path where the Association first tries to find an individual LP, and in absence of this, the Association takes the leadership providing their own liquidity and dedicating the yields for a new iteration of the grants program. At the current state of the DAO this seems like a reasonable and straightforward option.

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9

Fully aligned with the points made by the other delegates here. This is more than just a liquidity problem; it’s our first test case for bootstrapping the Obol economy. The Association should act as the liquidity provider of last resort to ensure a successful launch. Excited and looking forward .

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10

Can you expand on this?

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11

There is a problem with raising funds from delegates - only a portion of the tokens used for voting by, for example, cp0x are actually held on cp0x’s own balance; the rest mostly come from unknown addresses.

A third option is also possible - to structure the liquidity raise as a 50/50 split:

  • 50% from Obol, with profits going to the treasury. The funds could come from the unexecuted second drop, where a significant amount remains.
  • 50% from any user who wants to participate
12

Basically, when you provide liquidity in Pendle, you are doing it in a wrapped version of a yield-bearing token (aka stOBOL) and its zero-coupon derivative (aka PTs → PT stOBOL). Therefore, after maturity, the whole LP position is 100% redeemable for the underlying… stOBOL.

An individual trader could do the same, but let’s say they need to exit earlier for any reason; in that case, it could happen that they have lots of PTs and need to incur some slippage to exit the pool (which is PT stOBOL–wrapped stOBOL) and lose a small amount of OBOL tokens.

But if you hold until maturity, that issue is mitigated (assuming Pendle contracts remain SAFU).

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what do you mean with “paired with SY-stETH or SY-aETH" ?

Pools in Pendle are independent. You could go outside pendle and use the SYs to create an LP position but doesnt make much sense imo

1 Like