Ostium Announces Phase Two Compensation Plan: Offering USDC Installment Payouts and Equity Conversion Options
On October 9, Ostium released design updates regarding the Phase II loss compensation plan for Liquidity Providers (OLPs). This plan offers two compensation mechanisms for users whose losses exceed 1,000 USDC and who have not opted for the Convenience Allocation:
- Default Plan A (USDC Installment Repayment): Funding sources include recovered and future recovered funds (distributed pro-rata after deducting the Phase I portion), specific revenue shares from the Ostium protocol and Gateway (initially 50% of Ostium's opening fees), as well as potential partner incentives or revenue sharing.
- Optional Plan B (Ostium Labs Equity Conversion): Users compliant with securities regulations may, in the next priced funding round, convert a portion of their unpaid losses into equity in Ostium Labs at that round's valuation. The share class will align with the team's, and the total equity held by participating users will be subject to a fully diluted cap.
The Phase II portal is scheduled to go live on October 30, allowing eligible users to claim their pro-rata allocation of Plan A funds; those who opt for equity conversion will no longer receive subsequent installment payments under Plan A for the converted loss portion, which will help accelerate the repayment process for the remaining unconverted funds.
Ostium emphasized that this compensation plan was voluntarily initiated by the project and does not guarantee full recovery of lost funds; specific implementation details and parameter scales are still being refined.