Convertible Deposits
Converting Stability Into Strategy
Convertible Deposits (CDs) turn idle stablecoins into strategic capital, while unlocking flexible access to liquidity and a path to capturing potential OHM upside. Instead of choosing between holding OHM or staying in stables, CD’s lock in a future OHM conversion price, while keeping your capital productive. Receipt tokens keep you liquid: you can borrow against them, trade them, or hold to maturity and choose to either redeem 1:1 in stables or convert to OHM at a potential discount if the market moves in your favor. Meanwhile, the Olympus treasury is strengthened in the background.
How It Works
At their core, CDs are simple. You deposit stablecoins and receive a position that comes with two parts: a receipt token that represents your deposit, and a Conversion Right that gives you the opportunity to acquire OHM in the future, at a predefined conversion price. Together, these mechanisms create the flexibility to borrow, trade, redeem, or convert, adapting to market conditions and your strategy.
This position is made up of two components:
- Receipt Token — cdfUSDS-[Deposit Period] (e.g. cdfUSDS-6m) : an ERC6909 receipt token (optionally wrappable into an ERC20) that represents your deposit, redeemable for your original USDS after a fixed deposit period. For each asset, there will be one or more available deposit periods, it is up to the user to select the deposit period.
- Conversion Right : an optional right to convert the deposit into OHM at a predefined price, prior to the expiry of the convertible deposit position.
The Conversion Right is stored internally, exists for the full term of the CD, and is non-transferable by default. However, it can be wrapped into a transferable NFT, which allows it to be sold, transferred, or potentially used with other DeFi platforms.
If OHM’s market price moves above the predefined conversion price, your Conversion Right becomes valuable, giving you the option to capture upside by converting, or simply redeem your stablecoins 1:1 if the market isn’t performing in your favor.
Borrowing Against Your CDs
A key feature of Convertible Deposits is the ability to borrow against your receipt tokens, similar to how Cooler Loans unlock liquidity against stable collateral. Instead of sitting idle, your CD position can be used as collateral to access credit while you wait for maturity or decide whether to convert into OHM.
- Liquidity without exiting: Use your receipt token as collateral to borrow stablecoins without exiting your Convertible Deposit position.
- Default handling: If a loan is not repaid by the end of its term, the protocol seizes the collateralized receipt tokens and applies the underlying deposit to settle outstanding debt. Repaid principal is returned to the borrower; the unpaid portion goes to the Treasury. Any excess value or rewards are handled by the protocol’s default process.
- Flexibility for strategy: Borrowing lets you keep your optionality intact. You can still trade, redeem, or convert later, provided your loan is repaid.
This Cooler-inspired design turns CDs into productive collateral, while preserving the same proven protections that safeguard Olympus.
Strategic Benefits of Convertible Deposits
Exiting a CD position is designed to balance holder flexibility with protocol sustainability. You can always redeem at full value by waiting until maturity, or reclaim instantly for access to immediate liquidity (with a small fee for early access). This fee creates room for secondary market activity, where arbitrageurs can step in to provide liquidity by purchasing receipt tokens at a discount and later redeeming them for full value.
For OHM supporters: CDs provide upside through a fixed, predefined, conversion price. If OHM trades higher at maturity, you can convert at a discount, while still retaining the fallback of redeeming 1:1 in stablecoins.
For traders and liquidity providers: CDs create opportunities around both the Conversion Right and exit mechanisms. You can arbitrage between reclaim discounts, secondary market prices, and redemption value, or manage liquidity across positions to capture spreads.
For patient arbitrageurs: Buying receipt tokens below face value (for example, at $0.95) and redeeming later for $1 is a straightforward strategy to earn by simply waiting, rewarding those willing to provide liquidity.
For stablecoin holders: CDs turn stablecoins from idle reserves into a strategic position. They offer a way to stay in stables, while unlocking liquidity through borrowing, capturing upside by converting to OHM, or simply redeeming at maturity with full stability preserved.
Getting Your Deposit Back: Redemption Period
When it comes time to exit a CD position, you have three primary options:
- Redeem: start redemption at any time and, after the waiting period (equal to your deposit term), receive your stablecoins 1:1 or redeem and convert into OHM.
- Reclaim: exit instantly for a small fee, reflecting the cost of accessing immediate liquidity.
- Transfer Receipt Token: sell your receipt token (e.g. cdfUSDS-6m) on the secondary market or transfer it to another wallet.
Convertible Deposits expand the role of stablecoins and OHM within the Olympus ecosystem. By combining stability with liquidity, tradability, and upside potential, CDs provide a versatile toolset that serves a multitude of participants, all while reinforcing the treasury. Simple in design yet powerful in practice, they give holders more strategic options and strengthen the protocol as a whole.
