The Next Chapter: Optim’s Approach to Cardano DeFi

Optim Labs
5 min readJun 30, 2023
Community Update

After a brief development hiatus, Optim Finance is back and building for the Cardano DeFi ecosystem. In this article, we’ll provide an update on our recent activities, share our new strategic direction, and give you a glimpse into what the future holds for Optim Finance.

A New Chapter Begins…

As you may know, Optim Finance took a pause on new development for 3–4 months following our mainnet launch in December. During this time, we navigated through challenging market conditions and reassessed our strategy. While we ramped down activities across the board — marketing, operations, smart contract development, DAO formation — we retained one of our best full-time developers as well as Zygo as Tech Lead. Our technical team spent February and March improving the core Bonds and SPO Bond system then completed design work and code for our Vault products during April and May.

We’re excited to announce that we’ve found a viable path forward and see a bright future ahead. Our team has been working hard behind the scenes, and we’re now ready to level up, with a renewed focus on product development, community outreach and education, and DAO formation. We’re onboarding our first dedicated marketing team member, Quant, and welcoming back our Operations Lead, Blocks. Zygo continues to provide oversight and technical guidance, assisting with strategic decisions and reviewing smart contract development. Our Product Lead, Meeth, will also be stepping back into a full-time role to lead Optim into this exciting new era.

Reflecting on Our Journey

We launched our first product on mainnet during the depths of the bear market. Development and audit costs were high, DeFi activity on Cardano was low, and there were concerns about general ecosystem support. Moreover, we faced difficulty in successfully releasing a token due to market conditions coupled with a VC overhang. As a result, we decided to slow down and reassess our strategy instead of burning cash without a clear plan in the face of high execution costs and a relatively inactive market.

As the bear market progressed, Cardano saw slow but steady organic growth of DeFi protocols across the ecosystem. Closely monitoring these developments, we learned some very valuable lessons from the successes and failures of other projects in the ecosystem. As we observed, we also noticed a shift in several key areas that ultimately led us to believe in the potential for success. These changes provided the context and confidence we needed to invest heavily in the Cardano ecosystem and set the stage for our revival.

Our decision to revive Optim is based on the following key factors:

  1. Steady growth of the Cardano DeFi ecosystem: Despite the slow start, we have seen consistent growth in DeFi protocols on Cardano, demonstrating the potential for further expansion and innovation. As they say, “slow and steady wins the race.”
  2. Improved development tools and costs: With the release of Aiken language for smart contract development and other advancements, development costs have decreased, allowing us to experiment and find product-market fit more effectively.
  3. Increased community participation: The Cardano community has shown a growing interest in DeFi, adopting basic protocols and improving DeFi literacy.
  4. Stronger support from key stakeholders: The Cardano Foundation, Emurgo, Catalyst, and others have demonstrated renewed commitment and support for the ecosystem.
  5. Forthcoming release of USDA fiat-convertible stablecoin: Emurgo’s impending release of the USDA stablecoin will further enhance the Cardano DeFi landscape.

Optim Yield Products

In the early stages, Optim focused on standalone yield products due to the slow growth of the Cardano DeFi ecosystem and the technical infeasibility of non-custodial yield aggregation. However, as the market evolves and on-chain opportunities expand, we are shifting our focus to adapt to the dynamic environment and expand the scope of Optim products.

Our innovative Liquidity Bonds (SPO, IBO, ISO) were designed to explore the design space of native, unique-to-Cardano yield products that cater to the distinctive needs of our ecosystem. Their design and development allows us to stay at the forefront of the DeFi space, ensuring that we deliver value to our community and fostering growth within the Cardano ecosystem.

We recently surpassed the milestone of 10MM ADA in Total Value Locked (TVL) with our SPO Liquidity Bonds alone, and we anticipate continued success as we refine our existing products and extend our offerings to include IBO Bonds and more.

Optim Product Roadmap

Short-term Focus: Enhanced SPO Bonds & IBO Bond Platform Launch

In the next 2–3 months, we’ll be:

  • Releasing upgrades to SPO Bonds, featuring shorter durations for increased flexibility
  • Launching our IBO Bond platform, kickstarting with Optim’s own bonds issuance
  • Actively reaching out to new ecosystem projects for opportunities and collaborations

Long-term Focus: Pioneering Real World Assets/RealFi on Cardano

Over the next 18 months, our primary focus will be on Real World Assets/RealFi on Cardano. To facilitate this, we’re currently underway:

  • Developing smart contracts for Vaults, the core building blocks for our initial RWA
  • Designing Vaults with a junior/senior tranche structure, deposit and withdrawal windows, enforced interest rates, collateral pledges, and a distribution waterfall for the tranche structure

Vaults are crucial infrastructure for RWAs, as the structure of many RWAs are actually loans. Capital is pooled and structured on-chain, with off-chain loans funding productive real-world economic activity. Our short-duration loans will fund trade finance, supply chain finance, and FinTechs in emerging markets that enable high-quality SMEs and consumers to access capital based on proprietary data and advanced risk assessment technology. Generally, this sector is known as private credit. We view progress and innovation in this segment as crucial to Cardano’s long term mission of “banking the unbanked”.

We’ll be releasing more information, documentation, and educational material on RWAs/RealFi on Cardano in the coming months. It is an important and growing category of DeFi that hasn’t yet seen any implementation on Cardano.

The Future of Optim’s Token ($OPTIM)

At Optim, we’re dedicated to a transparent and sustainable token strategy that benefits our entire community. After careful consideration, we’ve decided to introduce a revamped approach to the OPTIM Token that we’re confident optimizes the interests of our community, growth of our DAO, and utility for holders.

Sustainable Tokenomics: Fostering Organic Growth

Drawing inspiration from sustainable token strategies in the DeFi space, we are adopting a community-centric approach that emphasizes:

  • A flexible vesting schedule aligned with the best interests of our community
  • Long-term utility for all stakeholders
  • Fair distribution for enhanced decentralization

The OPTIM token will be released sometime in Q3 or early Q4 of this year. We’ll be releasing detailed information on the distribution mechanics, vesting schedules, and utility in the near future.

The Adventure Continues…

As we gear up for this new phase, Optim’s dedication to our community and the Cardano DeFi ecosystem is stronger than ever. Our strategic pivot, updated product roadmap, and community-focused token strategy ensures Optim continues to pursue innovation, growth, and value creation for our users. With a clear vision and renewed focus, we’re poised to further contribute to a dynamic Cardano DeFi landscape. We appreciate your support and can’t wait to celebrate our achievements, milestones, and breakthroughs with you as we embark on this new phase of our journey together.

Ready to join the revolution? Stay connected with us by following us on Twitter, joining our Discord community, and subscribing to our Medium for the latest updates, announcements, and opportunities to get involved.

Let’s shape the future of DeFi on Cardano together!