Olympus Docs | Olympus Docs
Last updated
Last updated
Olympus was launched in March 2021 on the Ethereum (ETH) network by a pseudonymous team led by “Zeus.” It’s a protocol that handles decentralized reserve currency (also known as non-algorithmic stablecoins).
Olympus is governed by a decentralized autonomous organization (DAO), Olympus DAO. A DAO is one of the most exciting features in the DeFi world as it’s basically an entity with no central leadership and is instead managed by its users.
Olympus DAO provides an alternative liquidity mining strategy for users and looks to promote OHM as a currency with constant purchasing power. Olympus utilizes a unique approach via the aforementioned digital-asset-backed currency to create a free-floating market in its ecosystem. In other words, Olympus attempts to make OHM immune to inflation by supporting OHM with stable assets in the crypto market. At the same time, OHM is sold or minted according to the needs of the crypto market.
Essentially, the operations or mechanisms mentioned above show that Olympus plans to become the central bank in the crypto world with high-quality encrypted native assets in the treasury that are independent of USD or other fiat currencies. With long-term goals in mind, Olympus encourages their users, or Ohmies, to invest in OHM coin with patience in order to enjoy more attractive rewards in the future.
OHM is the native token of Olympus, an ERC-20 token that’s compatible with other Ethereum-based projects. Olympus stakers are nicknamed Ohmies.
Olympus backs its OHM tokens in the treasury using digital assets such as DAI. Hence, the price of OHM rarely falls below a certain threshold of 1 DAI. One of the main features of Olympus is that it offers an abnormally high Annual Percentage Yield (APY) of up to 8000%. It achieves this through the Olympus protocol, which is part of the DeFi 2.0 movement. The protocol maintains its Liquidity Pools (LPs) sustainability through bonding and staking mechanisms. This protocol-owned liquidity model is a huge success and has risen to multiple Olympus forks.
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. The treasury will grow when users buy the bonds or LP tokens available on the platform.
OlympusDAO also handles treasury growth. As OHM’s floor price is pegged to DAI, OlympusDAO will mint or sell OHM based on its value relative to DAI. 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.
When OHM’s value is higher than the floor price of 1 DAI, the protocol takes it as a signal that there’s demand for more OHM. Thus, the Olympus treasury will continuously mint OHM as staking rewards and sell them through the bonding process. In this situation, users are also encouraged to stake their OHMs to enjoy the high APY and token rewards. This loop system is the core idea of OlympusDAO.
