Thread by @BoxTobby

A Twitter thread for Newbies in @OlympusDAO

1. An asset that is able to preserve purchasing power in a volatile market like cryptocurrency is highly desirable. The goal of @OlympusDAO is to create the potential future reserve money.

#OHMisBacked #OlympusDAO101
@OlympusDAO

2. $OHM is created without needing to mirror the dollar's purchasing power. Instead of attempting to peg to the dollar, it creates a new asset by contracts, that can eventually serve as a reserve currency for the DeFi sector and beyond.

3. The protocol must hold at least 1 unit of stablecoin to mint every new OHM entering circulation, and it expands its supply as it accrues more capital to back new issuance, as long as traded above the 1 dollar value.

4. The increase of the supply is distributed to those supporting the project by staking OHM. Every eight hours, the protocol awards a percentage of the amount staked, which is automatically compounded to the staker's position.

5. Higher yield doesn't often ensure sustainability. Also in many cases, a protocol's treasury is largely composed of its own native tokens. @OlympusDAO attempts to get around this with the protocol-owned liquidity (POL).

6. Rather than 'renting' liquidity from token holders by paying rents as mining incentives, @OlympusDAO buys it outright by minting OHM tokens. The treasury benefits both from increasing the value of reserves and from receiving the transaction fees generated from the LP tokens.

7. While the goal of @OlympusDAO is to create a relatively stable asset that is decentralized and can be used as the future reserve currency, for now, the focus is not on stability. During this initial phase, the primary objective is to build as large a treasury as possible.

8. When users buy bonds, they contribute either LP tokens or other assets into the treasury. The treasury will hold more stable assets and it can afford to back more OHM tokens and keep the distribution to stakers within longer period of time. Hence the high APY is maintained.

Here is the end of the thread. I hope the OHM newbies find it useful.