Olympus DAO is a community owned decentralized financial infrastructure, which aims to bring more stability and transparency to the world of finance. Ok, so what does that mean?
Basically users swap from whatever token into OHM, and earn a yield based on the backing the protocol with ETH or DAI. The protocol has a treasury and the speculation is that the value of crypto will go up.
What’s more interesting about the protocol is that it owns the liquidity it needs to be used. This means that liquidity mining is no longer necessary, and takes a massive load off the protocol to incentivize liquidity miners. That sounds pretty wild, but just means that money is incentivized to stay instead of jump from protocol to protocol, and big whales dumping the token.
Olympus also makes it cheaper for other protocols to use OHMs liquidity, which means they don’t have to do the dance to attract new users. Pretty cool, because it builds a funding ecosystem for protocols that isn’t as exploitative.
Unfortunately it’s not backed by much… 1/40 with stables and about 1/4 with crypto. That means that a lot of it is hype… But that doesn’t mean it isn’t a good play.
I can lock in a 7,000% APY. Why wouldn’t I do it while it works. Right now I get 6% every 5 days, plus the price appreciation of the token. As long as we are in a bull market these kinds of plays make sense. However, the risk is definitely rug pulls and the token price getting absolutely nuked. The risk analysis is a bit different because the token rebases, so my quantity goes up. Meaning that I can afford small dips in price as long as happen slower than the emissions.
Overall, super interesting protocol to learn about. Will keep my move private on this one, but think these innovations are crucial for defi to keep evolving.