Thread by @jimbobkos

One for the @OlympusDAO OHMies.

More recently there have been some comments that $OHM is already exhibiting stability during its ‘expansion phase’.

Here are some metrics to evaluate ‘stability’ through the eyes of an Insto investor:

Context:
OlympusDAO is currently in its ‘expansion phase’ (EP), where its objective is to bootstrap the network. During the ‘mature phase’, the protocol will then focus on stabilising the $OHM price.

There is NOT an expectation that $OHM should be stable during EP.

Beta:

Generating OHM’s beta to Bitcoin and Ethereum over rolling 30d periods, there is a decreasing trend towards zero, highlighting OHM’s return profile becoming less influenced by $BTC and $ETH

Correlation:

Using a similar metric to Beta, OHM’s correlation with $BTC and $ETH is also trending towards zero, demonstrating close to no correlation with $BTC and $ETH price movements

Daily volatility:
A stable asset is expected to exhibit low volatility (i.e. minimal price fluctuation around its average).

Whilst the daily volatility of $OHM is trending downwards, it is still magnitudes higher than stablecoin incumbents $USDT $USDC $UST $DAI $sUSD

Zooming further into stablecoin daily volatility, $OHM should be targeting a daily volatility of +/- 0.5% which would be consistent with the likes of $USDT and $USDC

Lastly, by categorising OHM’s return profile, we see:

Cell C17 & C20: OHM doesn’t demonstrate a clear direction when $BTC is -ve. ~50% of outcomes are positive/negative.

Cell C18 & C21: The magnitude of returns when BTC is -ve is much higher than outcomes for stablecoins

The full report is here😘

Just reiterating, there is NOT an expectation that $OHM should be stable during EP. This exercise will be repeated again once the protocol enters into its ‘mature phase’ where its stability will be much more heavily critiqued.