Blockchain technology has created a new era of decentralized finance (DeFi.) Olympus DAO is one of the most innovative DeFi projects in operation today, and it is quickly redefining how financial interactions are conducted. Keep reading to know more about how it is creating the first decentralized reserve currency.
Table of Contents
- What is Olympus DAO?
- How does Olympus DAO work?
- Why is Olympus DAO different?
- Introducing OHM: Olympus Token
- Is the Olympus DAO decentralized?
- How to get started with Olympus DAO?
- Keep learning about DeFi with DappRadar
What is Olympus DAO?
Olympus DAO is a decentralized autonomous organization (DAO) that focuses on protocol-owned liquidity (POL). It’s the protocol leading DeFi 2.0, an era that promises to solve decentralized Finance (DeFi) issues with liquidity rewards.
It was launched in March 2021 on the Ethereum blockchain. The protocol’s goal is to create a DeFi ecosystem that is transparent and stable for its community.
As a DAO, any Olympus member can create proposals on the forum for discussion and post to snapshot for a governance vote. The community gets to vote and decide on the future of the protocol’s policy, strategy changes, and so on.
Its native token is called Olympus (OHS), and it’s the protocol’s stable currency and governance token. Protocol-owned assets back each token in the Olympus treasury.
How does Olympus DAO work?
As you know, the Olympus DAO network consists of dedicated community members who execute decisions and protocol mechanisms that are voted on through community governance.
The protocol uses a bonding model that allows users to buy discounted OHM tokens – their native tokens. This bonds users to the network and provides them with an incentive to increase the native token supply through yield-farming initiatives.
Around 99% of all liquidity is owned by Olympus, solving liquidity issues of early DeFi projects.
Introducing OHM: Olympus Token
The Olympus Protocol utilizes the Olympus Token (OHM) as its native currency. The Olympus Token is a stable cryptocurrency backed by digital assets on the Olympus treasury – not pegged to a fiat currency like the US dollar.
The all-time high value of OHS was $1,334.36 in November 2021, and the lowest price reached $9.06 in September 2022. The token’s circulating market capitalization is over $297.98 million at the time of writing, and the OHS price stood at $10.45.
“Olympus aims to become Web3’s premiere decentralized reserve currency”
The protocol’s desire is to make OHS a currency with deep liquidity so that people can easily use it to pay for other assets, products, and services. Also, the token is designed to have medium to long-term growing stability, preserving holders’ purchasing power.
Why is Olympus DAO different?
Olympus DAO was the solution that the entire DeFi field was looking for. How? Making liquidity on decentralized exchanges secure without depleting protocol resources and, in other words, reinventing yield farming.
While automated market maker (AMM) decentralized exchanges (DEX) need to present plenty of tokens liquidity so that cryptocurrency traders use them with little slippage in trades, this doesn’t always happen. That’s when yield farming comes up, allowing liquidity providers (LP) to stake their LP tokens in exchange for high rewards on the DEX’s native token. However, this wasn’t a perfect solution either.
To motivate LPs to keep their liquidity locked in their pools, AMMs offer rewards too high to function for long without diluting the supply of the native token.
Olympus DAO, instead of renting liquidity like yield farming was initially doing, brings the use of bonds to DeFi. Olympus bonds allow users to buy discounted OHM tokens by giving their LP tokens or other cryptocurrency assets to the protocol.
This means that the Olympus DEX liquidity is owned not by liquidity providers anymore but by the protocol itself. Furthermore, “Olympus rewards stakers with compounding interest, which makes staking more profitable over time.”
What makes $OHM so desirable:
1. Deterministic Liquidity (Olympus owns its own liquidity, and you’re guaranteed to be able to exit)
2. Flexibility in Monetary Policy
3. Native OHM-Bonds (Debt)
4. Scalability
5. Stable, but not pegged
(20/X)
— OlympusDAO (@OlympusDAO) October 11, 2022
Is the Olympus DAO decentralized?
This simple question is also meaningful. According to the protocol’s official documentation:
“The DAO is pursuing a strategy of ‘progressive decentralization.’ Currently, major components of the protocol are controlled at a high-level by the DAO. Though, ultimately the focus is on creating a foundation at the Treasury, Policy and economic levels, and to enable the community to directly operate protocol mechanics – in a trust- and process-minimized fashion.”
This means that, as of this moment, as most protocols that self-proclaim decentralized autonomous organizations (DAOs), Olympus is also early on its path to full decentralization. One must say, though, that this protocol is one of the leading DAOs in the space.
- Did you know? DappRadar is also building its own DAO
How to get started with Olympus?
If you want to join the Olympus DAO community, own OHS, and use the protocol’s DeFi solutions, head over to the official website and connect your Ethereum-compatible wallet.
In the dapp, you can buy Olympus bonds – by trading various tokens for OHM at a discounted price, stake your OHS, swap tokens, and more.
Keep learning about DeFi with DappRadar
If you are interested in investing in, using, or developing DeFi projects, DappRadar is the right place to follow the industry’s development.
In addition to offering accurate data in user-friendly rankings, our team also analyzes the market and creates reports and educational content. In this way, we accompany you throughout your journey into the wonderful world of decentralized finance.
We hope you enjoyed learning more about Olympus DAO. DappRadar will continue to follow the path of the protocol, and you can be updated by following our Twitter and joining our Discord.
(button) Overview The DeFi Industry
Useful links
- Decentralized Finance (DeFi): DappRadar’s Ultimate Guide
- What is Yield Farming in Crypto? The Beginners Guide
- What is DeFi 2.0? How OlympusDAO Reinvents DeFi
The above does not constitute investment advice. The information given here is purely for informational purposes only. Please exercise due diligence and do your own research.
