Try Quests to earn cryptoThe low down on OHM - Olympus 101
One of the most talked-about Defi protocols in the history of crypto, in this dashboard I am going to explain what made OHM so famous and how the protocol works.
In it's simplest form a rebase token, with a rebase token being a token with which the supply expands. When OHM came around in the early days of DEFI, staking was a popular way of investing with the long term in mind but rebase tokens were unheard of.
So what made OHM popular, the game theory behind it requires an OHMIE an OHM holder to stake their tokens in order to benefit from rebases. once you had staked your OHM you would get a token called SOHM which represented the OHM you had staked, with time and patience your SOHM holding would increase, of which you could replace for OHM at any time.
The idea behind OHM is that it's decentralised reserve asset, just like the most popular currency in the world the USD is backed by assets held in the federal reserve. OHM is backed by a number of assets too which are held in its treasury with the largest being in the stablecoin DAI.
The view of Zeus one of main people behind the project is that while OHM is backed by a number of assets it finds it value from the marketplace, as he believed a dollars value is ultimately based on the sentiment of the market, so would OHM.
As outlined on it's website OHM is backed and not pegged to any given price. Each OHM is backed by at least 1 DAI in the treasury with the treasury buying back OHM at less than 1 DAI with Dai being a stable coin pegged to a dollar. Source - OlympusDao Finance
GOHM launched on November the 19th 2021 was a very development in the OHM protocol, by holding GOHM a user could benefit from potential price increases of the OHM protocol that stakers can benefit from by holding the GOHM token. A wrapped token allowing for cross-chain compatibility, and for the GOHM asset to be used on a variety of platforms expanding the uses of sOHM.
Breakdown Of OHM Tokens - Olympus Dao
Inverse Bonding another development in the protocol saw an approach to dealing with sell pressure, the protocol would buy your OHM for a slightly higher cost than its price with an asset from the treasury and then burn the OHM bought, removing it from circulation and increasing the marketcap and therefore increasing the price of OHM.
For early investors in the protocol they could benefit from APY of 200,000% upwards, this attracted a lot of attention from the wider crypto community due to the potential for profit long term. If you had friends in Crypto you may have seen them show you an APY calculator, waxing lyrical about how in just a few months they would be millionaries based on the current APY.
In the future with the growth of OHM forks many of these forks would take advantage of the high APY they were offering by having a calculator investors could used to see the potential growth of their investment.
Now OHM apy is at a much more reasonable level, with an APY of 468.9%, still high when compared to traditional finance but much less than in the early days.
With high APY in it's early beginnings OHM was seen as a massive opportunity for those interested in DEFI to stake and occur long term value. At it's hight it became a top 100 crypto currency with a single token being valued over 1,000 dollars.
OHM is an extremely active DAO allowing holders to take part in governance and vote on the future of the protocol. All changes suggested are voted on by holders making decisions extremely democratic. With the only requirement being that you hold SOHM or OHM-DAI LP, utilising the snapshot website to carry out these votes. OHM - Snapshot
Bare with me there are a lot of different assets to go through!
• OHMV1 - THe OG, the OHM token you would buy to stake and the first none staked version of OHM.
• SOHMV1 - representing the OHMV1 you had staked this would increase in supply every rebase.
• SOHMV2_OLD - An iteration on SOHMv1 that was made in May 2021 to pave the way for OHM V2.
• WSOHM - The precursor to GOHM, WSOHM allowed for the use of OHM with different protocols and solved an issue with some OHM holders jumping ship after rebases. Read more here Wrapped Staked OHM and Improving Staking
• OHMV2 - A direct replacement for OHMV1 in the wake of changes to Olympus becoming interchain.
• SOHMv2 - representing the OHMV2 you had staked this would increase in supply every rebase.
• GOHM - has the rebase properties of WSOHM, with improvements to cross-chain functionality and protocol usage it also has added bonding functionality.