One take ive seen is "I get why other protocols would benefit from owning liquidity but I don't see why Olympus needs to exist"

I think the fact that others benefit is exactly why. it kind of goes along with this 👇🧵
It seems like everyone is in favor of, at least, protocol owned liquidity. Given it is properly executed, this is a viable solution to the liquidity mining problem.
The problem is that buying liquidity is more expensive in the short term than renting liquidity.

This cost is in the form of new tokens, which dilute current holders to the benefit of future holders.
This is a difficult thing to balance. If you have a $100m market cap and want to accumulate $10m liquidity, you need to spend 10% current circulating supply. This means almost 10% dilution for current holders.
This is why yields are crazy high on OHM. The protocol is aggressively accumulating assets, and compensates for it by increasing the balances of those staked. This minimizes dilution, creating an economically viable model despite the high short term costs.
This is a very specific tokenomic setup though. Not everyone can do this.

The good thing is you don't have to.
Here's something I can see happening frequently in the future. [warning: this is only a hypothesis]

Project X launches liquidity mining rewards for sOHM-X.
They utilize Olympus Pro to accumulate that liquidity, to whatever degree their tokenomics demand and can accomodate
If their need outweighs their ability, they then approach Olympus. Project X has already demonstrated alignment by incentivizing and accumulating an sOHM pool, and so they ask the DAO for assistance.
The DAO, favorable to the project, agrees to commit x OHM toward bonds, and ends up owning 20% of the pool. An insignificant amount relative to its total liquidity holdings, but quite significant for Project X
This is favorable to Project X because their cost of capital diminishes. This is favorable to Olympus because Project X brings new activity and capital into the econohmy (it's cost of capital is also likely lower since it produces more circular econohmic activity)
Olympus isn't really doing anything new here. It is and will be accumulating assets anyways. The only difference is the risk it takes on (which should always be systemically insignificant) and the positive externalities it creates.
All of this is currently theoretical because it hasn't been done yet, but this should create a virtuous cycle.

growth in econohmic activity -> diminished macroeconohmic risk -> heightened opportunity cost -> growth in econohmic activity
Remember, Olympus also owns the liquidity rails and takes fees on anything routed through them. This allows it to capture and retain financial energy better than comparable systems.
There's even a non-zero probability outcome that pairing with OHM becomes almost compulsory. The more liquidity we consume, the higher the cost of capital becomes outside of the econohmy and the cheaper it becomes inside the econohmy.
If that does prove to be the case, first movers will have a huge advantage. So what are you waiting for anon?

Utilize OHM as the currency its meant to be. Join the econohmy.
You don't need to be plugged in to the DAO or even the community (though we'd love to be frens); just make some good faith gestures, demonstrate legitimacy, tell the ohmies what you need, and see what they say

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More from @ohmzeus

13 Jun
Proof of Work Mining vs. Proof of Reserve Bonding

Similar inputs, different outputs

A thread 👇👇👇👇👇👇👇👇👇 Image
Proof of work mining is pretty well understood at this point

Miners use computers that solve math problems to earn block rewards: new tokens minted by the protocol

Mining is how networks like Bitcoin and Ethereum remain secure against attackers
Generally, mining is talked about from the point of view of the protocol (at least from what I see). People will say the purpose of mining is to secure the network, and it is: for the protocol.

For the miner, the point is not to secure the network. The point is to make money.
Read 22 tweets
7 Jun
Unpopular opinion: Bitcoin falling from #1 would be one of the most bullish things to ever happen to crypto
“But ser,” the threatened maxi says, “Bitcoin falling from #1 would mean Lindy isn’t a thing. That means nothing can hold value.”
Well ser, what about the revolutionary thought that valuable things will hold value, and non valuable things won’t?
Read 17 tweets
4 Jun
Ready to build ser

The upcoming OHM x FRAX partnership is a big one. I hope you’re paying attention anon

Find out why
For those unfamiliar with Olympus or Frax, they’re actually quite similar protocols

Both have a protocol treasury acting as a massive whale. That treasury influences the market through market operations to manifest desirable behavior
In the case of Olympus, that behavior is currently to feed the treasury with assets and liquidity.

In the case of Frax, that behavior is a stable peg at $1.

Frax cares about price and less about backing. Olympus cares about backing and less about price.
Read 18 tweets
26 May

I think the crux of the issue here is that no non-sovereign blockchain assets have shown any potential to actually replace stablecoins

A thread on what I mean by this

- Non sovereign currency narrative is dying because existing attempts have failed
- They've failed because they don't try
- A non-sovereign currency needs a non-sovereign central bank
- A currency with a decentralized bank has the best chance of replacing stablecoins

Bitcoin has been around for over 12 years now. During that time, it has gone from a super volatile, super well-performing asset to...a slightly-less volatile, still well-performing asset

The same can be said for ETH 6 years in
Read 20 tweets
20 Apr
1/21 - Stability and growth through bonds:

How they're designed, how they've worked so far, and the role of reserve vs liquidity bonds

A 🧵👇👇👇👇👇👇👇👇👇👇👇👇
2/21 - Bonds have become the cornerstone of Olympus

Today they are our primary treasury accumulation mechanism; and, with the passage of a recent proposal, they're slated to remain in that role…
3/21 - But there was actually a time when bonds weren't in the picture at all

The initial design here centered solely on a sales contract, which would sell and buy directly to/from users
Read 21 tweets
8 Apr
Bonds are probably the hardest piece of @OlympusDAO to understand. But they're also one of the most important, and sometimes the most lucrative.

A thread on what bonds are, how they fit into the big picture, and how they're going

Bonds are the treasury's way of capturing liquidity. They give users the ability to trade SLP tokens for $OHM directly with the protocol.

Our website displays the bond price in DAI for you, because it's effectively a trade at that price
When you make the trade, you're put on a vesting schedule. Over the course of 15 epochs (5 days), the $OHM you bought becomes redeemable.

You're incentivized to bond by a discount. The discount increases and decreases along with debt outstanding (more bonds = lower discount)
Read 15 tweets

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