Today I will explain why bonding can be more profitable than staking, the misconceptions around it, and how you can get the most out of your $OHM
Let's do it! 🧵
Let's do it! 🧵
Even if you're not one of my ohmies, you have probably heard about game theory and the behavior matrix that help @OlympusDAO popularize the (3,3) meme.
While it's true that this powerful meme helped grow the community and understand the benefits of a common strategy (reduce sell pressure through staking), it only reflects the simplest actions that one can do in the ecosystem.
There are also advanced techniques such as:
🔹(4,4) combination of staking and bonding.
🔹(9,9) leveraging via @RariCapital or @MIM_Spell.
These techniques are more complex and require more skill and work, but can also end up in bigger profits than old-fashioned staking.
🔹(4,4) combination of staking and bonding.
🔹(9,9) leveraging via @RariCapital or @MIM_Spell.
These techniques are more complex and require more skill and work, but can also end up in bigger profits than old-fashioned staking.
So, as promised, today I'll focus on (4,4). But first you should fully understand (3,3) and (1,1).
The mechanics of staking are broadly known, but since bonding is more complex, here you have a nice explanation by @wagmianon:
(check next tweet for tldr)
The mechanics of staking are broadly known, but since bonding is more complex, here you have a nice explanation by @wagmianon:
https://twitter.com/wagmianon/status/1422431892029116416
(check next tweet for tldr)
Bonds tldr:
- Bonds allow you to buy $OHM at a discount price and directly from the protocol.
- Bonds have a 5-day linear vest.
- Discounts fluctuate according to the debt ratio.
- Since bonds have no slippage, there is a max payout for each bond.
- Bonds allow you to buy $OHM at a discount price and directly from the protocol.
- Bonds have a 5-day linear vest.
- Discounts fluctuate according to the debt ratio.
- Since bonds have no slippage, there is a max payout for each bond.
Most people prefer to stake cause it's easy and you can set it and forget it. But since you can buy bonds at a discount, sometimes you get the chance to outperform the 5-day staking returns by purchasing a bond.
Now that you know that bonds can be more profitable than staking for a short period of time, you may be wondering:
Why would I bother to monitor bond discounts all the time if the staking APY is already huge and grows my stack every 8 hours?
Why would I bother to monitor bond discounts all the time if the staking APY is already huge and grows my stack every 8 hours?
That's where (4,4) comes into play.
Imagine that you usually stake, but when you spot a good enough bond discount, you sell your $OHM to buy a bond (that allows you to grow your stack faster than staking those 5 days) and then you stake the profits to keep (3,3)ing.
Imagine that you usually stake, but when you spot a good enough bond discount, you sell your $OHM to buy a bond (that allows you to grow your stack faster than staking those 5 days) and then you stake the profits to keep (3,3)ing.
That's a chad move. Ever heard of compound interest?
Imagine that instead of getting the current 5-day rate of 6,4% you can get 8-9%.
Now imagine that you do this consistently (even if it's from time to time) for a long period of time... do you hear the snowball growing? I do.
Imagine that instead of getting the current 5-day rate of 6,4% you can get 8-9%.
Now imagine that you do this consistently (even if it's from time to time) for a long period of time... do you hear the snowball growing? I do.
I feel like most people avoid bonding for the following reasons:
🔹It looks complicated.
🔹You need to monitor bonds closely and spend a considerable amount of time.
🔹(4,4) was not presented in the behavior matrix and (1,1) sounds worse than (3,3).
🔹It looks complicated.
🔹You need to monitor bonds closely and spend a considerable amount of time.
🔹(4,4) was not presented in the behavior matrix and (1,1) sounds worse than (3,3).
So regardless of price action, if you are able to (4,4) successfully, you will grow your $OHM stack faster than (3,3)ing.
And thanks to the snowball effect, the more times you can do it, the faster your stack will grow.
And thanks to the snowball effect, the more times you can do it, the faster your stack will grow.
Hopefully this thread made you realize that everyone can benefit from (4,4).
But please be aware of the potential flaws:
🔹People can be faster than you purchasing the bond and you may end up losing a rebase.
🔹Since you need eth for gas your eth stack will decrease.
But please be aware of the potential flaws:
🔹People can be faster than you purchasing the bond and you may end up losing a rebase.
🔹Since you need eth for gas your eth stack will decrease.
Finally if you still have doubts, don't worry. You can always check all the resources that your fellow ohmies have built over the past months!
🔹 Sherpa team: Join our discord and ask questions. discord.com/invite/olympus…
🔹Asfi university: attend one of @ishaheen10 lectures.
🔹Brian's (4,4) Calc: test bonding scenarios and see how (4,4) can outperform (3,3). docs.google.com/spreadsheets/u…
🔹Asfi university: attend one of @ishaheen10 lectures.
🔹Brian's (4,4) Calc: test bonding scenarios and see how (4,4) can outperform (3,3). docs.google.com/spreadsheets/u…
🔹Bond Alert Bot: I developed a bot that lets you create custom alerts for bond discounts so you don't have to spend all day checking. I recently added a simulation functionality like in Brian's Calc.
Happy bonding!
Fin.
Fin.
PS: I just discovered this thread from my friend @xh3b4sd with a super detailed explanation on the bonding mechanics and risks.
https://twitter.com/xh3b4sd/status/1432437701832228868?s=20
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