(26/n)
We can think of $OHM as promissory bank notes fully backed by reserve assets in the DAO’s treasury and the DAO being like a private bank.
We can think of $OHM as promissory bank notes fully backed by reserve assets in the DAO’s treasury and the DAO being like a private bank.
(27/n)
Why non-pegged #stablecoins when using another crypto-native #cryptocurrency like #Bitcoin or @Ethereum is possible?
The issue w/ pegging to other cryptos is price volatility. Stablecoins are mainly pegged to $USD, exposing them to US regulation & @federalreserve policy.
Why non-pegged #stablecoins when using another crypto-native #cryptocurrency like #Bitcoin or @Ethereum is possible?
The issue w/ pegging to other cryptos is price volatility. Stablecoins are mainly pegged to $USD, exposing them to US regulation & @federalreserve policy.
(28/n)
@OlympusDAO currently focuses on supply+ over price+, w/ the target of having $OHM function as a currency that holds purchasing power regardless of market volatility.
+There are perks for putting one’s resting capital to work in the #DeFi ecosystem to generate revenue.
@OlympusDAO currently focuses on supply+ over price+, w/ the target of having $OHM function as a currency that holds purchasing power regardless of market volatility.
+There are perks for putting one’s resting capital to work in the #DeFi ecosystem to generate revenue.
(29/n)
$OHM started w/ a 1:1 backing w/ $DAI (note: this does not mean “pegged”). New $OHM could only be minted if there was enough corresponding $DAI in the treasury
Like banks, @OlympusDAO lends $OHM in exchange for earning yield (staking)
docs.olympusdao.finance/basics/staking
$OHM started w/ a 1:1 backing w/ $DAI (note: this does not mean “pegged”). New $OHM could only be minted if there was enough corresponding $DAI in the treasury
Like banks, @OlympusDAO lends $OHM in exchange for earning yield (staking)
docs.olympusdao.finance/basics/staking
(30/n)
Maintaining stability: using algorithmic functions to sell $OHM at a discount if it is > the value of $DAI in the treasury, and buying it back and burning it when the treasury assets are > $OHM price.
Maintaining stability: using algorithmic functions to sell $OHM at a discount if it is > the value of $DAI in the treasury, and buying it back and burning it when the treasury assets are > $OHM price.
(31/n)
90% of sales profit goes to $OHM stakers, & 10% to the treasury. The rebase happens 3x daily at 0.35% of the total supply per epoch.
docs.olympusdao.finance/protocol-inter…
90% of sales profit goes to $OHM stakers, & 10% to the treasury. The rebase happens 3x daily at 0.35% of the total supply per epoch.
docs.olympusdao.finance/protocol-inter…
(32/n)
The percentage used to be 0.6%. When you compound the rebases over an entire year, it begins to make sense how the APY can be so high.
It illustrates how the APY reached over 293,000% near the product launch & how APY is primarily restricted by rebasing rates & rewards.
The percentage used to be 0.6%. When you compound the rebases over an entire year, it begins to make sense how the APY can be so high.
It illustrates how the APY reached over 293,000% near the product launch & how APY is primarily restricted by rebasing rates & rewards.
(33/n)
The DAO’s current emissions rules also provide some solace for anyone nervous of a “bank run.”
The DAO’s current emissions rules also provide some solace for anyone nervous of a “bank run.”
https://twitter.com/ishaheen10/status/1413369807450247168?s=20
(34/n)
The longer you stake, the more likely you will reach a “risk-free” premium for your original investment.
Check this neat spreadsheet that allows you to change some inputs to see different APY over time depending on staking parameters:
docs.google.com/spreadsheets/d…
The longer you stake, the more likely you will reach a “risk-free” premium for your original investment.
Check this neat spreadsheet that allows you to change some inputs to see different APY over time depending on staking parameters:
docs.google.com/spreadsheets/d…
(35/n)
Governance is approving proposals to lower rebase rewards and slow down emissions, signaling that the community values the long-term growth and sustainability of the protocol.
scattershot.page/#/olympusdao.e…
Lower rebase rates should benefit bonders +increase runway for stakers
Governance is approving proposals to lower rebase rewards and slow down emissions, signaling that the community values the long-term growth and sustainability of the protocol.
scattershot.page/#/olympusdao.e…
Lower rebase rates should benefit bonders +increase runway for stakers
(36/n)
$OHM's (3,3) Game Theory:
docs.olympusdao.finance/basics/basics#…
Participants have a strong incentive to be active.
The value of $OHM should become irrelevant compared to the amount of $OHM one generates for staking early:
docs.olympusdao.finance/basics/basics#…
$OHM's (3,3) Game Theory:
docs.olympusdao.finance/basics/basics#…
Participants have a strong incentive to be active.
The value of $OHM should become irrelevant compared to the amount of $OHM one generates for staking early:
docs.olympusdao.finance/basics/basics#…
(37/n)
The more $OHM is staked, the lower the supply and more stable prices and selling pressure will be.
The only issue is this has initially resulted in a much higher valuation of $OHM than its original free-floating price floor of 1:1 to DAI.
The more $OHM is staked, the lower the supply and more stable prices and selling pressure will be.
The only issue is this has initially resulted in a much higher valuation of $OHM than its original free-floating price floor of 1:1 to DAI.
(38/n)
That’s where the other treasury assets come in — by introducing bonds, @OlympusDAO aims to get price volatility back under control.
docs.olympusdao.finance/basics/bonding
That’s where the other treasury assets come in — by introducing bonds, @OlympusDAO aims to get price volatility back under control.
docs.olympusdao.finance/basics/bonding
(39/n)
The DAO describes bonds as “a cross between a fixed income product, a futures contract, and an option.”
These instruments are vested over five days, and users are incentivized to bond when the discount rate is higher than with staking $OHM for five days.
The DAO describes bonds as “a cross between a fixed income product, a futures contract, and an option.”
These instruments are vested over five days, and users are incentivized to bond when the discount rate is higher than with staking $OHM for five days.
(40/n)
Assets gained from bonding deposit to the DAO treasury, and $OHM is minted against the risk-free value (RFV) of treasury assets distributed to stakers.
docs.olympusdao.finance/references/glo…
Assets gained from bonding deposit to the DAO treasury, and $OHM is minted against the risk-free value (RFV) of treasury assets distributed to stakers.
docs.olympusdao.finance/references/glo…
(41/n)
Income from bond sales also helps the protocol maintain a higher APY, but even if the protocol were not to get any more bonds, it would sustain the current APY for about 200 days.
👉 duneanalytics.com/queries/29153/…
👉
Income from bond sales also helps the protocol maintain a higher APY, but even if the protocol were not to get any more bonds, it would sustain the current APY for about 200 days.
👉 duneanalytics.com/queries/29153/…
👉
https://twitter.com/d0mPablo/status/1413580368880545794?s=20
(42/n)
If the bonder so chooses, they can claim rewards early based on how long the bond has been vested.
Bonding is considered an “active” investment strategy when compared to staking.
If the bonder so chooses, they can claim rewards early based on how long the bond has been vested.
Bonding is considered an “active” investment strategy when compared to staking.
(43/n)
$OHM treasury:
- $DAI: A stablecoin soft-pegged to USD, backed primarily by ETH & USDC
- $FRAX: A stablecoin that is partly collateralized and partly stabilized algorithmically
- LP & SLP: @Uniswap & @SushiSwap Liquidity Positions, respectively
$OHM treasury:
- $DAI: A stablecoin soft-pegged to USD, backed primarily by ETH & USDC
- $FRAX: A stablecoin that is partly collateralized and partly stabilized algorithmically
- LP & SLP: @Uniswap & @SushiSwap Liquidity Positions, respectively
https://twitter.com/d0mPablo/status/1413580386790166533?s=20
(44/n)
More capital-efficient $DAI Bonds will soon succeed LP rewards.
The mechanics will remain the same for bonders, the main difference being that the bonder pays with DAI rather than OHM-DAI SLP.
olympusdao.medium.com/dai-bonds-a-mo…
More capital-efficient $DAI Bonds will soon succeed LP rewards.
The mechanics will remain the same for bonders, the main difference being that the bonder pays with DAI rather than OHM-DAI SLP.
olympusdao.medium.com/dai-bonds-a-mo…
(45/n)
Addressing the 293,000% APY elephant in the room:
APR and APY are common metrics seen in #DeFi, though it is important to understand the difference between them.
Addressing the 293,000% APY elephant in the room:
APR and APY are common metrics seen in #DeFi, though it is important to understand the difference between them.
(46/n)
APR stands for “Annual Percentage Rate.” To get APR, you must calculate the interest rate plus any fees yearly and displayed as a percentage.
APY stands for “Annual Percentage Yield.” It’s the rate you can earn on an annual basis, including compound interest.
APR stands for “Annual Percentage Rate.” To get APR, you must calculate the interest rate plus any fees yearly and displayed as a percentage.
APY stands for “Annual Percentage Yield.” It’s the rate you can earn on an annual basis, including compound interest.
(47/n)
Because the DAO is in issuance mode, inflation of $OHM is so high that when factoring in auto-compounding, the APY for staking has been large enough to keep even early investors deeply in profit throughout the recent cryptocurrency market downturn
Because the DAO is in issuance mode, inflation of $OHM is so high that when factoring in auto-compounding, the APY for staking has been large enough to keep even early investors deeply in profit throughout the recent cryptocurrency market downturn
https://twitter.com/d0mPablo/status/1413580361779527689?s=20
(48/n)
Even as the token value deflated, staking rewards in the form of supply inflation lead to profit for stakers and an ++market cap for the protocol.
Even as the token value deflated, staking rewards in the form of supply inflation lead to profit for stakers and an ++market cap for the protocol.
(49/n)
Auto compounding is nothing ground-breaking, but it’s convenient and allows for easy calculations of the sustainability of the network’s revenue and incentives for stakers.
It assumes the treasury continues to grow & no coordination attacks to maintain current levels.
Auto compounding is nothing ground-breaking, but it’s convenient and allows for easy calculations of the sustainability of the network’s revenue and incentives for stakers.
It assumes the treasury continues to grow & no coordination attacks to maintain current levels.
(50/n)
APY is not guaranteed. Governance is passing proposals to slow down emissions, after all.
How will the protocol sustain itself once the APY inevitably cools down?
Governance is inextricable from the APY, as the community ultimately chooses. (Part III follows)
APY is not guaranteed. Governance is passing proposals to slow down emissions, after all.
How will the protocol sustain itself once the APY inevitably cools down?
Governance is inextricable from the APY, as the community ultimately chooses. (Part III follows)
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