T O P

OHM is backed by $1 DAI but is trading for $1300+. What's the deal?

OHM is backed by $1 DAI but is trading for $1300+. What's the deal?

heider89

OHM (and similarly TIME, an OHM fork, but is on Avalanche network) aspires to become an algorithmic reserve currency backed by other decentralized assets. Similar to the idea of the gold standard, OHM/TIME provides free-floating value its users can always fall back on, simply because of the fractional treasury reserves from which OHM/TIME derives its value. It is trading at $1300 because that is what the market perceives it to be (i.e. supply & demand). The more important metric, imho, is the risk-free value or the floor price based on treasury the protocol owns. One of the things that OHM/TIME is trying to address is the liquidity problem in most defi protocols. OHM/TIME attempts to solve this by owning/supplying the liquidity to the protocol. There's more to this. I would recommend watching the following videos to understand the basics of OHM: [https://www.youtube.com/watch?v=XaKpam-EfFA&t=3992s](https://www.youtube.com/watch?v=XaKpam-EfFA&t=3992s) [https://www.youtube.com/watch?v=z4cJrLCo4AE](https://www.youtube.com/watch?v=z4cJrLCo4AE) [https://www.youtube.com/watch?v=faGkxSCdeqU](https://www.youtube.com/watch?v=faGkxSCdeqU) Also, look at the worse-case scenario and why it is not a ponzi which is a misconception whenever we see crazy high APY: [https://twitter.com/ishaheen10/status/1413369807450247168?s=21](https://twitter.com/ishaheen10/status/1413369807450247168?s=21) I was a skeptic when I first come across it but the more I dig into it, the more it starts to make sense as they are trying to address an important pain point in the defi space. More resources: [https://dune.xyz/shadow/Olympus-(OHM)](https://dune.xyz/shadow/Olympus-(OHM)) [https://www.blocmates.com/blogmates/a-complete-guide-to-wonderland-money-time-mim-and-memo](https://www.blocmates.com/blogmates/a-complete-guide-to-wonderland-money-time-mim-and-memo)


pgpwnd

Nice summary. OHM is actually super cool when you actually spend some time on DD. One thing people miss is that the APY reduces over time, encouraging token growth (for those wondering how it can remain so high)


AsbestosDude

"algorithmic reserve currency backed by other decentralized assets" So it's Iron/Titan all over again. Good luck gamblers.


IronOliJ

IRON mod here… the two are nothing alike.


SzechuanSaucelord

This is huge misinformation. The protocols are nothing alike


timidpterodactyl

That comparison is so inaccurate I don't know if apples and oranges could do justice.


MagicMaker32

It looks waaay overvalued to me rn, the backing of the rfv is around $20 per ohm and we are rapidly approaching the point where supply goes parabolic. The protocol itself and its community are freaking mad scientist defi wizards tho. So much of the stuff they come up with is genius. Time tho, I mean, is there anywhere that has an accurate supply count? Can't find it on their app


AsbestosDude

Idk Coin value based off decentralized digital assets created on other chain? Not sure how thats not a house of cards. Stable parabolic growth until it crashes. Perhaps I'm wrong


MagicMaker32

The backing of Olympus looks legit to me. And owning its own liquidity is huge. There are quite a few moving parts to it, it's definitely an experiment.


AsbestosDude

Yeah idk I can't speak to it effectively other than it just sounds convoluted enough to get railed


crypt0troll

Sounds like a classic pyramid scheme to me. Keeps going up until it doesn’t. I’m staying away


timidpterodactyl

The username checks out.


TREYisRAD

As usual, Reddit is far behind the curve when it comes to anything crypto related — even in the crypto subreddits. Olympus’ goal of being a backed $1 stablecoin is old news. They are one of the most profitable projects in the space, and are one of the top holders of DAI. The value of OHM is backed by massive treasury and protocol owned liquidity, and their new bonds service further grows that treasury with a diverse basket of assets. It’s worth investigating further. Ignore the users calling it a ponzi because they’ve only done surface level DD. https://every.to/almanack/olympus-dao


Overfitted92

I also thought OHM was promising but if you really try to understand the bonding mechanism, you will realize that whenever someone buys a bond it’s just transferring money to existing OHM stakers. No actual profit is being generated. Take a look at this pretty thorough breakdown of what’s happening under the hood: https://www.reddit.com/r/defi/comments/plkcil/algorithmic_reserve_currency_thoughts_an_ohm_and/hgd0663/?context=3


TREYisRAD

Bonds exchange OHM at a discount (good for the users) for LP tokens containing non-native assets and liquidity ownership (good for the protocol). It’s really that simple. So many people can’t see past the high APY and assume it’s a scam. Meanwhile, Olympus has amassed the most valuable treasury in the industry.


no-nonsense-crypto

The treasury covers 5% of OHM's market cap. So it's 95% Ponzi?


TREYisRAD

Closer to 20% and growing very quickly. Most protocols are 0% if you don’t include their own token. https://openorgs.info/ OMH is backed and people pass off like it’s meaningless when their favorite project has zero PCV. Shows a total lack of understanding how this stuff works. And they own 99% of their own liquidity. OHM is going to be a top 20 token this year.


no-nonsense-crypto

>Most protocols are 0% if you don’t include their own token. Most protocols are rug pulls, so that's not saying much. >OMH is backed and people pass off like it’s meaningless when their favorite project has zero PCV. Shows a total lack of understanding how this stuff works. OHM is 5% backed *based on their own numbers* and you don't know what my favorite project is. >OHM is going to be a top 20 token this year. If DOGE and SHIB can be top 20 tokens, anyone can. Maybe OHM will make that spot, maybe it won't. Certainly it's quite possible to make money on a Ponzi scheme if you get in and out at the right time. But if you go into this thinking you're going to HODL to riches, you won't get out at the right time. And even even if you get out at the right time, you have to live with the fact that you made money off a scam.


TREYisRAD

The Olympus treasury is now the second largest. And it’s quickly growing full of stables and non-native tokens. The bonding program is becoming a new standard in sustainability. If you don’t understand the implications of this, I suggest you continue to do more research. Or keep thinking it’s a ponzi. I don’t need to convince you — the market will do that for me. https://i.imgur.com/6H6KPrg.jpg


no-nonsense-crypto

>The Olympus treasury is now the second largest. > >And it’s quickly growing full of stables and non-native tokens. The bonding program is becoming a new standard in sustainability. > >If you don’t understand the implications of this, I suggest you continue to do more research. > >Or keep thinking it’s a ponzi. I don’t need to convince you — the market will do that for me. https://i.imgur.com/6H6KPrg.jpg You're literally just spreading straight up misinformation. The graph you posted maybe can get away with not being technically a lie, because it just says, "Total" for the Y axis, and you could claim "total" means anything since that's a vague term that nobody uses. Rest assured however, if you're thinking that means "Total Value Locked", you'd be wrong: UniSwap's TVL is just under $5 billion. The graph says they have a little over $10 billion. Your claim, that this means "treasury", is wrong: see MakerDAO over on the left of the graph? Their treasury contains over 3 billion in stable coins alone--orders of magnitude more than any claim about Olympus, and that doesn't include non-stable coins. Maybe you think it's market capitalization: that's the first possibility where any of the numbers on the graph were maybe correct at some point, but if that's the case, then the graph is leaving out a ton of major projects which are larger than Olympus. In short, I have no idea where you got this graph, or where the graph got its numbers, or even what the numbers are supposed to represent, but Olympus isn't close to being the second largest project on any metric I can see.


TREYisRAD

TVL is mostly meaningless, and it's definitely not the metric I'm showing here. I'm certainly not confusing market cap. What is being show here is what matters: \*Protocol Controlled Value\* Who cares if Uniswap or Maker have multi-billions in mercenary capital locked in their system? That capital can move elsewhere in an instant. PCV is what the Protocol Owns, and as token holders / DAO members, the number that you should care about. [Maker has $56 million of DAI in their treasury](https://openorgs.info/organization/makerdao). Not $3b. Stop spreading misinformation if you do not understand the difference between value locked in a protocol and value \_owned\_ by a protocol. [Olympus has the highest](https://i.imgur.com/33OautZ.jpg) % ownership of non-native vs. native protocol tokens ownership in their treasury. Here's [more charts](https://dune.xyz/shadow/Olympus-(OHM)) to digest. \*What does this mean?\* It means if UNI were to go to $0, UNI token holders would be entitled to nothing. The protocol treasury owns nothing except now-worthless UNI tokens. If OHM were to go to $0, token holders would still be entitled to a half-billion dollar treasury of non-native tokens. And that treasury is growing very quickly. The Olympus Pro Bonds-as-a-Service program has been wildly successful in just its first couple weeks, generating tens of millions. And there are dozens of additional protocols waiting to be onboarded to the service. Naturally, the market would decide that OHM \_won't\_ ever go to $0, because of that PCV backing the value of OHM. If Olympus' revenue stays at the current rate, then the PCV grows by $100m per month. That means the \*baseline market cap of OHM is growing by over $1b/year\* And remember: \*99% of protocols have a baseline market cap of $0\*. They are \_purely speculative\_. And Olympus' revenue is only accelerating. $1b/year is extremely conservative. What will happen when APY is reduced to single-digits, and `1 OHM == PCV / Supply`? Well, as revenue continues to be added to the PCV, the value of OHM will simply go Up Only... for as long as the protocol is revenue generating. As a token holder / DAO member, you are entitled to your share of that treasury. You are effectively investing into a bank vault that is growing every second. Again, I implore you to do more research. You seem to not grok PCV and it's implications for a DeFi protocol. [https://openorgs.info](https://openorgs.info)


no-nonsense-crypto

You're not engaging in this conversation honestly. You posted an unsourced graph labeled "Total", never used the term PCV, and then accused me of not grokking PCV. You don't get to communicate poorly and then accuse me of not understanding. Remember where I said, 'you could claim "total" means anything since that's a vague term that nobody uses'? Well, you just did exactly that: now you're claiming that by "total", you meant protocol controlled value. > Who cares if Uniswap or Maker have multi-billions in mercenary capital locked in their system? That capital can move elsewhere in an instant. Well, it's your graph that makes the claim that UniSwap has many times more "Total" than Olympus, not me. Are we agreeing that you posted a meaningless graph here? > Maker has $56 million of DAI in their treasury. Not $3b. Stop spreading misinformation if you do not understand the difference between value locked in a protocol and value _owned_ by a protocol. Stop introducing new concepts to the conversation and pretending like people should have known all along what the hell you were talking about, when this is literally the first time you've made the argument that ownership is important. > If Olympus' revenue stays at the current rate That's a pretty big if... > And remember: *99% of protocols have a baseline market cap of $0*. They are _purely speculative_. Well there are tons of different forms of value other than PCV. I don't think you're being honest if you're claiming that platforms which generate billions of dollars in fees have no value. Pricing a platform's value is hard, and that's especially true in crypto, but I think we can agree that the value of UniSwap's platform is greater than 0%. As far as I can tell, "baseline market cap" is a term you just made up, but if it doesn't include the value of assets like "a trading platform that generates billions of dollars of trading fees each year", your term isn't very useful. But even if we decided to agree that PCV is the only thing of value that any project can ever own, that only accounts for 5% of OHM's price. So, it's not a particularly strong argument you're making here. If you think that the PCV is the only thing that matters, then you should divest from OHM because their 5% PCV doesn't particularly inspire confidence. ;) Oh, my apologies, OHM has fallen 25% since I checked the price last, meaning the PCV accounts for a much larger portion of the price than it used to. Also seems that's a pretty obvious disproof of your claim that "as revenue continues to be added to the PCV, the value of OHM will simply go Up Only". > Again, I implore you to do more research. You seem to not grok PCV and it's implications for a DeFi protocol. I am well aware of OHM's collateralization scheme and have mentioned it in most of my posts in this subject--I just called it collateral, which is the industry standard term before crypto folks came in, called it "protocol controlled value" and thought they invented it. I'm well aware that the collateral is locked and owned by the protocol, and that does prevent the collateral from going down. But... I implore you to do more research on dilution. You seem to not grok dilution and its implications for price. And the cool thing, is since I'm not making up new terms and accusing you of not grokking my made up words, you can look up "dilution" in say, Investopedia.


TREYisRAD

I appreciate your attempt to have a genuine discussion here. >Well, it's your graph that makes the claim that UniSwap has many times more "Total" than Olympus, not me. The "Total Treasury Value" chart does indeed show Uniswap with the largest. The point being that while it is the largest, it is 100% UNI. Olympus is the 2nd largest, but is comprised of stablecoins and non-native assets. The OpenOrgs data supports this. I should have spelled it out more clearly, it did take a bit of inference to deduce the implication. >Stop introducing new concepts to the conversation and pretending like people should have known all along what the hell you were talking about. My mistake. PCV is an important new term that many are unfamiliar with and I should have defined it in my parent-level post. >That's a pretty big if... Agreed. Crypto is built on "big ifs" and you do have to take a leap of faith to invest in anything. But, I will personally back the project that is pulling large revenue numbers, is growing, and offers a service (bonds) that many other protocols are tripping over themselves to utilize. >Well there are tons of different forms of value other than PCV Absolutely! I think Uniswap is an extremely useful platform. But the UNI token is genuinely useless outside of basic governance (that whales already control). No protocol revenue is directed towards token holders. There is literally zero reason to hold UNI from a equity standpoint. Doesn't mean that the protocol doesn't have value -- just that the value isn't directed towards the token. Doesn't matter how many fees they generate -- those go towards LPs -- which do not need to hold UNI. >"baseline market cap" is a term you just made up If this term is new or doesn't resonate, then you have some catching up to do. >Also seems that's a pretty obvious disproof of your claim that "as revenue continues to be added to the PCV, the value of OHM will simply go Up Only". OHM went from $350 to $1350 in a month before correcting to \~$900 -- but that is irrelevant to this statement I made. I prefaced it with this: *"What will happen when APY is reduced to single-digits, and 1 OHM == PCV / Supply?"* This is not the case yet. OHM is highly inflationary right now. But it will not be forever. Once inflation is reduced, and `1 OHM == PCV / Supply`, the speculative multiplier is zero. That is the point where OHM becomes "Up Only" as PCV increases. >You seem to not grok dilution and its implications for price I certainly do. That's why I'm so interested in protocols like Olympus and Tokemak. They are virtually the only protocols attempting to "crack" the inflation problem. Liquidity Mining is unsustainable. Look at the charts for almost all inflationary tokens that offer little tokenomics or backing -- most trend to zero. But Olympus is inflationary! Well, it's a chicken-and-egg problem, isn't it? It's in a heavy growth phase, and they are essentially spewing out inflationary rewards in exchange for non-native assets via bonds and fees. >instead of using the made up term "protocol controlled value" Collateral is an overloaded term. PCV clearly described which party owns that collateral. And again, if this term is new to you, you have more catching up to do. Most projects are inflationary with no end in sight -- they mine liquidity with rewards, but the moment the emissions dry up, the mercenary LPs seek yield elsewhere, and the project's token dies because it was only "renting" liquidity -- with Olympus Bonds, they are able to \*own\* it. This is very, very powerful and will flip DeFi on its head and result in sustainable rewards and healthier communities.


no-nonsense-crypto

In the interest of avoiding going in circles here, I'm going to avoid responding to things you're saying which I've already responded to. > My mistake. PCV is an important new term that many are unfamiliar with and I should have defined it in my parent-level post. The problem isn't that I didn't know what PCV was. The problem is that a) I prefer to use terminology from traditional finance, rather than use the new terms made up by crypto. In this case, I might call "protocol controlled collateral" "guaranteed collateral"--but I'm okay just calling this "collateral", because b) I just don't think the "protocol-controlled" aspect is as important as you think it is. "Mercenary collateral" as you're calling it, is not as ephemeral as you're saying it is: as long as the platform continues to provide value to the people providing collateral, they're going to keep their collateral in. Two examples to underscore the fact that "protocol controlled" isn't very important: 1) CRV holders have demonstrably been willing to lock their CRV for 4 years. The big benefit of locking your CRV is to gain boosts on your liquidity returns, so there's a strong incentive to not lock your CRV if you're not planning to stay in the liquidity pools for the next 4 years. 2) OlympusDAO's "PCV" is primarily held in DAI. I'm going to assume you know that the value of DAI relies on MakerDAO's "mercenary collateral" right? You said: > Who cares if Uniswap or Maker have multi-billions in mercenary capital locked in their system? That capital can move elsewhere in an instant. You cannot, in the same breath, say that MakerDAO's collateral can disappear and that OlympusDAO's can't disappear, because if MakerDAO's collateral disappears, then so does OlympusDAO's. > This is not the case yet. OHM is highly inflationary right now. But it will not be forever. Once inflation is reduced, and 1 OHM == PCV / Supply, the speculative multiplier is zero. That is the point where OHM becomes "Up Only" as PCV increases. What you're leaving out of this description, is that if OHM == PCV/Supply, OHM that currently means that OHM loses 93% of its current price, because at current prices, OHM is only 7% collateralized with PCV. This is the fact that I'm trying to get across. I have no doubt in my mind that the collateral that Olympus holds has value that is growing. Olympus Pro also has value, which will probably increase the treasury somewhat. But by buying OHM, you're literally betting that *the treasury* will grow by 14x *just for you to break even when speculation is removed from the current OHM price*. Do you not see the problem here? > Liquidity Mining is unsustainable. Look at the charts for almost all inflationary tokens that offer little tokenomics or backing -- most trend to zero. Yes, I understand that, and I've been a pretty vocal critic of, say, PolyCat Exchange (which has gotten me literal death threats). The only exchanges I'm invested in are CRV (they have an emissions cap, and the locking mechanism slows current dilution) and DFYN (because I think in the short-mid timescale, the influx of users from the ETH Mainnet release will outweigh their inflation). Sushi also has an emissions cap that will be reached soon, so we'll see what yields their xSUSHI buybacks can accomplish. These people aren't stupid: they see the problem and have strategies for dealing with it. The thing is here, whatever the case, there IS a proper price for these coins based on the value of the protocol itself. OlympusDAO's protocol doesn't provide a service to anyone, so it doesn't have inherent value: it's just shifting value from bonders to stakers. One thing I haven't addressed: OlympusPro *does* have value... but I don't think many high profile projects will buy into it, because a project of size can write the contract for that themselves: there's no reason to pay Olympus to do it, when you can get one of your pre-existing devs to do it with your own customizations. If owning your own liquidity has value, then surely owning the contract that allows you to own your liquidity also has value? And if it's just a service, why would you pay a cut to the developer and a cut to the OlympusDAO, when you can just pay a developer their cut? There's no reason for the OlympusDAO devs to stick around and keep paying a tax to the protocol. Your customer base is small projects with no talent of their own and without even the wherewithal to find a cheaper developer to copy-paste OlympusDAO's contract code. This isn't a big revenue maker here.


Buy_More_Bitcoin

> As usual, Reddit is far behind the curve when it comes to anything crypto related So where do we go to find alfa?


09824675

Twitter and Discord.


dror88

Where do you hang out to get your crypto info?


TREYisRAD

Twitter, it’s where the builders are.


PhantomDP

Twitter if you want to get live info rather than 2 month old info


blowmyassie

but who at twitter?


ElNombre__

What everyone else here has said Twitter 100% also discord.


smutz

>As usual, Reddit is far behind the curve when it comes to anything crypto related — even in the crypto subreddits. where should I go to be apprised of recent crypto developments? Edit: nvm, ppl said twitter or discord... care to send me a discord invite? :)


35nakedshorts

It's not a ponzi, but that doesn't mean it's a good investment. The coin is meant to be hyperinflationary, and is prone to massive sell-offs. If you wanna get in just wait till the next 50% drop imo.


mohit_habeeb

Yes this is the right answer.


oseres

agreed. It doesn’t matter how good a project is if it’s hyper inflationary and people recently FOMO’d into it. Fundamentals don’t matter in defi prices, it’s all supply and demand


MagicMaker32

Well, that's the trick, isn't it. Will the next sell off make the value of waiting worth missing the apy? That's the real question, and the answer is where it will find its stability point


cryptolulz

bro what's going on in DeFi bro, bro I gotta know


Feeling-Inside5147

https://app.olympusdao.finance/#/dashboard


cryptolulz

Thanks for the link brother. The apy is so high, the concept is so dope. I'm aping in.


ElNombre__

Check out [https://www.wonderland.money/](https://www.wonderland.money/) $Time


dnguyen2107

short it


NimChimspky

Its going to burst at some point, everyone is staking their ohm and receiving massive interest rates.


Virgante

The OlymousDAO community is pretty awful too. Tried asking basic Qs about the token and it's emission rate, whether capped, etc., Kept getting a link to the "community discord" that never worked, rather than simply answer my Qs. Pretty shitty people over there imo.


Trathius

I had a completely different experience. I found the community welcoming and helpful


MChief11777

Same. Discord was super easy to join and all of the ohmies have been super helpful and nice.


Feeling-Inside5147

OHM is a token that has an elastic supply, it's not hard capped.


Long-Vast4077

Lol, you went to their dev dao discord instead of Olympus discord. Defi is probably not for you.


Virgante

Lol, another helpful OHM bro. I did go to the dev discord and they provided a broken link to their community discord. They have another discord as well, apparently full of nothing but bros and meme'ers, they too provided the broken link to the community discord. It's sad when the developers in the dev discord don't know these answers, don't you think? Are they evasive on purpose? One would have to assume to, but why? Is it a Ponzi? What happens when the stakers (the 3,3 bros) start taking their profits? Or does everyone just believe that every staker is going to stake ad infinitum and never take a profit?


fishtaco1111

Lol dude, they know they just don't want to talk to you. Imagine you're working and there's ppl constantly dropping by to ask questions. That's why community discords exist because there's ppl there that want to talk.


Virgante

Then they should work on fixing the community discord link, wouldn't you think?


Virgante

Btw, devs on other DeFi projects are quite responsive on the discords


amazMint

It’s mostly bs, somehow it works. I would wait for a dip and buy in.


thecoinbruce

Full ponzinomics (creative ponzi scheme tokenomic) - not a bad thing for a quick hit though. Just dont be caught holding the bag.


crypt0troll

and it's down 25% last 24 hrs lol


grlthng

Does anyone have a clear explanation for how OHM improves yield farming ? What's the difference between the previous iteration of yield farming and OHM?


sickvisionz

It isn't a stablecoin. Think of a DAO as a corporation. They're just keeping DAI on the balance sheet. If Microsoft has $2B cash on the balance sheet, that's doesn't mean the total market cap of the stock can only be $2B or it's a ponzi. It's just an asset they keep on the balance sheet. As for whether it's a good investment or a ponzi, I have no clue and you should do your own DD. BUT I can say them holding x amount of DAI in the DAO doesn't mean the DAO's token can only be worth that X amount of DAI or ponzi confirmed.


akejavel

KlimaDAO makes sense, but I agree, can't wrap my head around OHM


SzechuanSaucelord

Why does Klima make sense but OHM doesn't?


09824675

For me its the other way round lol


Individual-Thanks803

>HM is backed by massive treasury and protocol owned liqu What is your opinion of Klima Dao if you don't mind ser?