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Emissions Manager

Overview​

The Emissions Manager (EM) is an Olympus Policy installed into the Kernel. Its purpose is to emit new OHM supply into the market in a programmatic way. At its core, its schedule is informed by two main variables: the base emissions rate and the minimum premium. This variables are configurable by OCG in the event that they need to be adjusted in the future. The calculation of premium (which equals market price / backing price) occurs every 3 epochs and is triggered by the heart.

When premium is greater than the minimum premium, the protocol will create a Convertible Deposits auction offering a computed amount of OHM in exchange for new reserves (in the form of USDS). If the premium target has not been reached, the auction will be disabled. The equation for this emission is: new supply = total supply * base emissions rate * (premium + 100%) / (minimum premium + 100%)

The EmissionManager tracks auction performance over a defined tracking period. If OHM is under-sold during the auction, a Bond Protocol market will be created as a fallback mechanism to immediately sell the remaining under-sold OHM, increasing the likelihood that the emissions target will be reached.

Key Variables & Definitions​

Core Parameters​

  • Base emissions rate - the base percentage of circulating supply to be sold per day (at minimum premium)
  • Minimum premium rate - the threshold premium required for emissions to be active (must be ≥ 100%)
  • Backing - the treasury backing value used in premium calculations
  • Tick size - the amount in OHM that each auction tick will have as capacity
  • Min price scalar - the multiplier applied to the price of OHM (≤ 100%) used in auction pricing

Calculated Values​

  • Premium - the percentage that market price is above backing (market price / backing price)

  • Current emission rate - the percentage of circulating supply to be sold per day at current premium:

    Base Rate × (1 + premium) / (1 + min premium)

    Returns 0% if premium is below minimum premium

  • Current emissions - Current emission rate × circulating supply (using gOHM supply in OHM terms as proxy)

  • Next emission rate/emissions - same calculations using next period's projected price

All core parameters are configurable by OCG and can be adjusted as needed.

Limitations​

Limited to Stablecoins​

The EmissionManager utilises v1 of the PRICE module, which provides the price of OHM in terms of the configured reserve token (currently USDS). It uses that value to determine the minimum price that the ConvertibleDepositAuctioneer contract will sell OHM at.

As a result, the EmissionManager cannot currently be configured to run auctions for assets that are not stablecoins, as the minimum price calculation would be incorrect.

Example Calculation​

Given:

  • Total supply: 15m OHM
  • Base emissions rate: 0.02%
  • Current premium: 200% (price: $30, backing: $10)
  • Minimum premium: 100%

Calculation:

New Supply = 15m × 0.0002 × (2 + 1) / (1 + 1) = 4,500 OHM

Result: 4,500 OHM will be offered (not minted - happens at conversion) through the auction over the next 3 epochs (24 hours total). If the auctions over the auction tracking period undersell, any remaining OHM will be sold through a Bond Protocol market as fallback.