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Olympus’s innovative protocol-controlled liquidity pool mechanism inspired various copycats that are now using Olympus’ staking rewards mechanism to accumulate assets. The protocol’s capability in making OHM immune to inflation also attracted many investors and participants into the ecosystem. Olympus’ incredibly high and well-maintained APY also looked enticing for new users who felt compelled to join the platform to stake OHM.

After OHM’s crash, it’s at its highest level of backing ever against the general treasury at 41%, according to the same dashboard. Shaheen, the founder and CEO of NetEquity Networks, an internet infrastructure company, has taught financial modelling and worked in private equity. Olympus’ cash flows caught his eye and after doing an analysis, as well as vetting the founder, Shaheen decided to make a long term investment in OHM last year. Olympus’s defenders counter that the project is not a scam and is an innovative financial model that embraces core DeFi values. Olympus is transparent and open-source,” Isfandiyar Shaheen, an OlympusDAO community member, told The Defiant.

Unique Tokens in Treasury

Olympus is a reserve currency protocol built with the goal of creating a decentralized, censorship-resistant reserve currency for the emerging Web3 ecosystem. The protocol is run by OlympusDAO, a network of dedicated community members who execute decisions and protocol mechanisms voted on through community governance. Despite decentralization being one of the most fundamental principles of Web3, there is over $100 billion USD in dollar-pegged stablecoins circulating the market right now. Ironically, this shows that we are still heavily reliant on fiat currency despite the whole notion of decentralization in Web3 and DeFi. Fiat-backed stablecoins are susceptible to inflation, which causes their real value and purchasing power to decline over time along with the currencies they are pegged to. Olympus’ goal is to build the reserve currency for DeFi, which retains real purchasing power that withstands the test of time.

Law crypto Deal icon An icon in the shape of a lightning bolt. It is known for its good schools, low crime, and large lots that allow for privacy, with few houses on the market with less than two acres of land. «What if Zeus, the pseudonymous founder of OlympusDAO, is actually Adam Neumann?» Levine wrote in January.

Who created OlympusDAO?

As OlympusDAO has grown into one of the most popular projects in decentralized finance, its creators – the pseudonymous “Zeus” and “Apollo” – have remained anonymous (until now, perhaps, in Apollo's case).

At its peak, the price of OHM went from $330 to an all time high of $1,639, but the asset seems to be on a downward trend since October last year. Screenshot source – Olympus DAO websiteWhen obtaining OHM by purchasing bonds, users will pay assets such as wETH, DAI, and FRAX to increase Olympus’ treasury funds to support the value of OHM. The growth of the Olympus DAO treasury combined with the agreement to control 99.8% of OHM, then the OHM of the inherent 1 DAI can have a market price that is hundreds or even thousands of times higher. Olympus DAO is the first decentralized reserve currency protocol with over 1,000% APY. As OHM’s floor price is pegged to DAI, bitcoin backs off record high on reports of india crypto ban will mint or sell OHM based on its value relative to DAI.

Small town, big money

It is also cross-compatible with other blockchains such as Avalanche and Arbitrum. When unstaking, sOHM tokens are burned, and users get back the equivalent amount of OHM. Consistent with the staking mechanisms that underpin alternative DeFi protocols, users are rewarded based on the amount of OHM tokens they stake. By promising a high rate of return , Olympus encourages its supporters and investors to buy more OHM from the market or act on more bonding from the protocol. The meme introduced by Olympus is also a topic that gained considerable attention on Twitter in late October 2021. The available strategies in the Olympus system are shown in the figure below for users’ reference.

  • Olympus is building OHM, a community-owned, decentralized and censorship-resistant reserve currency that is asset-backed, deeply liquid and used widely across Web3.
  • In other words, OHM’s price could move against the general sentiment in the market.
  • On January 17, a whale sold off 82,526 OHM coins (worth $13.3 million at the time), triggering a drop to a new low.
  • The protocol is run by OlympusDAO, a network of dedicated community members who execute decisions and protocol mechanisms voted on through community governance.
  • However, OHM seems to have been unable to meet its potential or at least seems to have failed at appreciating as the crypto market trends to the downside.
  • A free consultation is available to discuss your business needs, no obligation, just a friendly chat to work out if we can help.

The forum and voting platform it uses are populated by a mix of identifiable people and users with nicknames and cartoon profile pictures. Jayson Liang says OlympusDAO’s founders took away his ability to redeem his investment tokens. Recorded on the Ethereum blockchain 12 hours ago, the OHM holder used decentralizaed exchange SushiSwap to swap over 82,526 OHM tokens for $11 million in DAI.

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When OHM is worth less than 1 DAI, OlympusDAO will rebuy the bonds from users and burn OHM. As a result, the amount of OHM will be reduced, consequently leading to an increase in the value of OHM. OlympusDAO acts as the distributor and manages the fully mortgaged and free-floating asset OHM. The workflow of OlympusDAO begins with its treasury’s revenue. OlympusDAO first controls the OHM supply by growing its treasury through bond sales and LP fees.

This causes its supply to increase, leading to a decrease in its price. Though the protocol allows the price of OHM to be free-floating and primarily decided by market forces, it tries to keep the price as close to $1 as possible. Many DeFi protocols suffer from a lack of long-term, practical incentives for liquidity providers outside of distributing LP tokens. There’s a lot of money sloshing around in tony Weston, Connecticut. And if a new lawsuit is to be believed, the founders of a notorious crypto project that once held $800 million live there, too. OlympusDAO experienced an increase in its number of users, its treasury assets, and total value locked during 2021.

Treasury Balance

However, OHM seems to have been unable to meet its potential or at least seems to have failed at appreciating as the crypto market trends to the downside. OHM’s price action has been driven by early investors taking profits on their gains. A higher APY would also mean a higher premium, which would lead to a large amount of OHM as an incentive etoro social network trading review by fxexplained for inflationary output. At the same time, there will be a lot of OHM mining and selling operations in the market, and the price of OHM and the pledged APY of the agreement will also decrease. This means a corresponding loss for both Olympus DAO and users. $OHM is a decentralized reserve currency that remains unbound by a peg.

  • There are users that claim the decentralized reserve currency that OlympusDAO handles and the meme from Olympus’ game theory are nonsense.
  • OHM, governed by the Olympus DAO, is Web3’s decentralized reserve currency.
  • Here at NewsBTC, we are dedicated to enlightening everyone about bitcoin and other cryptocurrencies.
  • With interesting tokenomics and mechanics developed to ensure the sustainability of OHM, Olympus is an extremely innovative protocol that has managed to rapidly grow its treasury along with its community.
  • Thus, users who could not afford OHM with fiat may stake their DAI in the Olympus treasury and receive OHM according to the specific exchange rate.

In fact, OHM was created to be a credible reserve currency for Web3 and a store of value designed to preserve its real purchasing power over time. With interesting tokenomics and mechanics developed to ensure the sustainability of OHM, Olympus is an extremely innovative protocol that has managed to rapidly grow its treasury along with its community. Its game theory incentives had even exploded on the internet, with the meme going viral all around the web.

Olympus DAO investors

For example, the team recently added new bonds and provided a sneak peek into their new dashboard. Nonetheless, it’s difficult to say if Olympus will regain its previous highs as most cryptos do not recover after a prolonged crash. “In their own words, Olympus is a decentralized reserve currency protocol based on the OHM token. Each OHM token is backed by a basket of assets in the Olympus treasury. The goal of the project is to build a policy-controlled currency system, in which the behaviour of the OHM token is controlled at a high level by the OlympusDAO. The pseudonymous founder believe this system can be used to optimise for stability and consistency so that OHM can function as a global unit-of-account and medium-of-exchange currency.

  • This makes OHM viable to be used as a reserve currency as the mechanism would preserve its real purchasing power in the medium to long term.
  • After OHM’s crash, it’s at its highest level of backing ever against the general treasury at 41%, according to the same dashboard.
  • Consistent with the staking mechanisms that underpin alternative DeFi protocols, users are rewarded based on the amount of OHM tokens they stake.
  • Users can sell their LP tokens from DEXs such as SushiSwap, Uniswap or Curve, and other crypto assets such as DAI to buy OHM tokens at a discount.

Olympus’ documentation says the protocol will buy back OHM if it ever trades below the value of one DAI, a stablecoin pegged to the USD. There’s a raft of theories why Olympus has lost investors’ confidence, but it seems clear that the project’s Byzantine complexity and unorthodox mechanics are fueling the outrage. Irate investors this week have branded Olympus a Ponzi scheme that is using its liquidity protocols to enrich early entrants at the expense of latecomers.

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The strategies in the system include staking (represented by “+3”), bonding (represented by “+1”), and selling (represented by “-1”). Various prominent investors and crypto users used this meme in their tweets or added “” at the end of their Twitter handles. best day trading brokers and platforms 2021 The meme encourages people to “buy and stake OHM.” Through this strategy, users can keep earning high returns. As Olympus has a very strong community , this strategy has attracted various new users who are curious about the significance of “”.

Is crypto rebase taxable?

Tax when you sell or swap rebase tokens

You'll need to pay tax on any gain you make if you later sell or swap your rebase tokens – even if you've already paid Income Tax on rewards in most instances.

In order for the system to work, OHM holders were encouraged to interact with Olympus’s smart contracts according to a set of game theory principles «memefied» by the project’s community. The price then peaked at a bullish trend peak of $1,415 in April 2021. Institutional investors like Elon Musk’s Tesla and Michael Saylor’s MicroStrategy were reported to have invested billions in Bitcoin . Bitcoin’s price increase also positively affected the entire cryptocurrency market, prompting an increase in OHM’s price. The price recovered slightly but fell again at the end of July 2021.

olympusdao

Moreover, Olympus spawned the legendary 3,3 meme, shorthand for game-theoretic cooperation. In the context of the project, it entailed the choice to stake the OHM token to receive the eye-popping six-digit APY available at the project’s start. The protocol mints new OHM tokens when new bonds are created, and the majority of those tokens are paid out to stakers. Olympus took a different path by actually acquiring liquidity through its bonding mechanism instead of renting it through token rewards.

User Freddie Raynolds identified the Ethereum transaction used by a “savage” OlympusDAO user to dump $11 million in OHM. The transaction caused a 25% slippage and $5 million in liquidations for this asset, as Raynolds reported via his Twitter account. Become a member of CryptoSlate Edge and access our exclusive Discord community, more exclusive content and analysis. Footprint Analytics – OHM of PriceAn analysis of the main upside and downside factors through OHM’s coin price movements.