Olympus Protocol, and by extension its token OHM, aims to take on the role of global decentralized reserve currency by conducting an autonomous and dynamic monetary policy that allows it to fulfil the requirements of traditional reserve currencies. OHM is backed by crypto-native assets and it is designed to achieve relative stability and scalability over time, effectively bridging the gap between FIAT-pegged stablecoins and volatile crypto assets.
Medium of Exchange
$OHM and gOHM Staking: Users can stake OHM to receive gOHM, the governance token used to vote on proposals in the Olympus DAO. Governance: gOHM enables token holders to vote on governance proposals and effectively steer the decisions taken by the Olympus DAO. Yield-bearing: gOHM accrues more OHM over time, making it a lucrative investment.
Product deployment: Products and services that rely on OHM, such as liquidity pool pairings, generate demand for the token and increase liquidity. Financial services: Deployment of financial services that rely on OHM can generate demand and interest for the asset, reinforcing its overall value. However, due to the protocol's aim for stability, demand drivers relative to financial upside are limited.
Olympus provide users with an asset that is less volatile than most of other cryptoassets, without having to rely on FIAT-backed stablecoins. This creates value for institutional and retail investors that are looking for safe heaven assets during risk-off periods. Olympus also supports early-stage DAOs through their incubator program and grants program. Lastly, Flex Loans allow protocols to grow their protocol-owned liquidity through an interest free loan using gOHM as collateral to borrow OHM.
Value accrual to token: OHM token maps the value created by the supply and demand dynamic, as its value rises or falls with the demand for OHM. However, the token only partially captures the value through an increased claim on backing/treasury assets. Value accrual to protocol: Olympus captures value through fees generated by protocol-owned liquidity, some yield-generating activities, and services such as the incubator program, which offers support to early-stage DAOs in exchange for equity.
Revenue comes from: Deployment of treasury assets into other DeFi protocols generates revenue through yield and bribes. Incubator program investments also provide a source of revenue. Revenue is denominated in: Revenue is denominated in various cryptocurrencies, including but not limited to OHM. Revenue goes to: Revenue is added to the protocol treasury, where it can be used to fund additional investments, grow liquidity, and support the ongoing development of the protocol.
|Problems & Solutions
Olympus fills a gap that exists in the DeFi space, that of decentralized reserve currencies. The protocol solves the problem by issuing an OHM token that is backed by a basket of crypto assets. Olympus has created, through a hyperinflationary period at the start, a large treasury that always guarantees a backing of $1 for each OHM while not being pegged to that value, as traditional stablecoins are. The protocol enforces stability through its proprietary Range-Bound Stability mechanism.
Olympus Protocol does not have predecessors from which it borrows ideas, but rather has been a predecessor for several projects that used the OHM concept. This happened in the winter of 2021 when several new protocols were created and labeled as OHM-forks, although they all failed to achieve their mission.
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