Introduction

Inverse bonds were introduced to Olympus Dao as a way of supporting the price of OHM whenever OHM falls below its backing price per OHM. In order to help counteract any sell pressure & support the long term future of the protocol during times where it falls below the backing price.

With OHM's recent fall in price, this is no doubt a welcome feature for the many OHmies out there.

Before inverse bonding, the only way to interact with Bonding was to Bond, by trading an asset or liquidity for OHM an investor could gain OHM for a discount, the bonds however would be vested requiring the bonder to wait for the vesting to end and the OHM they bought at a discount to unlock. This was a more advanced feature due to an added need for speculation, waiting for unvesting and the possibility of it requiring an investor to have added liquidity.

Inverse bonding essentially works in the opposite way without the vesting and the option to buy liquidity. How it works is an investor can sell their OHM in exchange for an asset in the treasury getting a discount on the asset held in the treasury, the OHM is then burnt to reduce the supply of OHM which over time with enough OHM being burnt can increase the price of the OHM token.

With the feature only released a little over a month ago we see 132 distinct wallets that have interacted with the feature so far.

Here we can see the distinct wallets that have interacted with the feature daily, with a peak of 18 on the 12th of May. With it being a relatively new feature it may be taking time for investors to become aware of its addition and possible previous associations with bonding being a more advanced feature.

The average transaction is 40.3k USD highlighting that while the transactions may only be in the double digits in the chart above, those that interact with the feature are making large transactions.

So far DAI leads with the largest transactions on average, with LUSD being the asset with the lowest average transaction. It will be interesting to see if assets with more variable prices that are held in the treasury that aren't stable coins such as ETH will be added to the inverse bonding feature in the future.

The feature is quite promising with investors spending in the millions on a number of days when using the feature, despite the number of transactions never being higher than 100.

Above is the Inverse Bond Dapp as you can see you can currently sell OHM for a discount of 0.80% on DAI, with the protocol buying an investors OHM for 17.13$ despite the price of OHM being 17.05$. WIth DAI being one of the assets held by the treasury. Here is the link to the Dapp if you would like to take a look : Inverse Bonds OHM

Methodology

• Count the number of distinct wallets that have interacted with the protocol over time, by counting the number of distinct from address(es) that had interacted with the inverse bonds contract : 0x22ae99d07584a2ae1af748de573c83f1b9cdb4c0 using the flipside_prod_db.ethereum_core.ez_token_transfers table. Data is presented by: Inverse Bonds Distinct Wallets Total.

• Analyse the number of distinct wallets that have interacted with the feature daily by counting the number of distinct from address(es) that had interacted with the inverse bonds contract : 0x22ae99d07584a2ae1af748de573c83f1b9cdb4c0 and grouping by day using the flipside_prod_db.ethereum_core.ez_token_transfers table. Data is presented in the line chart : Inverse Bonds Distinct Wallets Daily.

• Evaluate the number of transactions and the amount transferred to the Inverse Bond feature, by counting the sum of the amount transferred daily, the total number of transactions daily that had interacted with the inverse bonds contract : 0x22ae99d07584a2ae1af748de573c83f1b9cdb4c0. The data was taken from the table flipside_prod_db.ethereum_core.ez_token_transfers. Data is presented in the line chart: Inverse Bonds Number Of Transactions and Amount Transferred Daily.

• Visualise the average amount paid for on an Inverse Bond transaction, by selecting the avg amount of a transaction and counting the number of transactions that had interacted with the inverse bonds contract : 0x22ae99d07584a2ae1af748de573c83f1b9cdb4c0 from the flipside_prod_db.ethereum_core.ez_token_transfers table. Data is presented by Average Transaction Per Inverse Bond Transaction.

• Examine the average amount spent per Inverse Bond asset by selecting the average transaction, number of transactions and the symbol of the associated asset where the asset was not OHM that had interacted with the inverse bonds contract : 0x22ae99d07584a2ae1af748de573c83f1b9cdb4c0 from the flipside_prod_db.ethereum_core.ez_token_transfers table. Data is presented in the pie chart Average Transaction Per Inverse Bond Asset.

How has inverse bonding performed since launch?

With the feature being launched on the 26th of April, let's take a look at the data on it's performance since then.

Conclusion

The inverse bonding feature is relatively new, with 132 distinct wallets interacting with the feature so far, despite the transactions never being higher than 100 the feature the average investment is 40.3k thousand dollars highlighting that investors are making large transactions when interacting with the feature. It will be interesting to see how the feature fairs over time and if Olympus Dao adds more assets to the inverse bonding feature, with DAI and LUSD being the only assets available so far.