Optimism Foundation and Ethos Reserve have announced a partnership to incentivize DeFi adoption on Optimism’s Layer 2 network. Starting on May 1st, Ethos Reserve will distribute up to $4.4 million worth of OP and OATH tokens to liquidity providers of $ERN, a stablecoin built on Optimism, as part of a 12-month-long program. The program aims to attract users to the Optimism ecosystem by providing incentives to liquidity providers on platforms such as BeethovenX, Digit.xyz, and Velodrome.
Significance of the Partnership
The partnership aims to accelerate the adoption of DeFi applications on Optimism’s Layer 2 network, which further aims to improve scalability and reduce transaction fees on the Ethereum blockchain.
The program will incentivize users to provide liquidity to the $ERN stablecoin, which is designed to offer a stable asset pegged to the US dollar. This program will enable users to earn rewards for providing liquidity to $ERN, thereby increasing the adoption of the Optimism network.
Director at the Optimism Foundation, Ben Jones, expressed excitement about Ethos Reserve’s efforts to incentivize users in the Optimism ecosystem. He stated that they are proud to see Ethos Reserve continue the trend of growth in decentralized finance within their community and Layer 2 networks.
Ethos Reserve is a non-profit initiative by the Oath Foundation, offering a novel multi-collateral debt management system and managed CDP vaults to deliver capital efficiency without compromising security or stability. Ethos Reserve enables users to take out interest-free loans in $ERN, with each token representing $1 in collateral value.
Optimism is a project focused on scaling Ethereum’s technology and expanding its ability to coordinate people worldwide to build effective decentralized power structures.
The Optimism Collective builds software for running L2 blockchains and aims to address key governance and economic challenges in the wider cryptocurrency ecosystem. The Collective is also committed to building a sustainable ecosystem through Retroactive Public Goods Funding.
Overall, the 12-month-long program is expected to attract more users to the Optimism ecosystem, which will boost the adoption of DeFi applications and improve scalability on the Ethereum blockchain.