Olympus

Other

Olympus is a decentralized reserve currency protocol that manages its own treasury. Users can stake the native OHM asset in exchange for the profits generated by the treasury.

Risk Rating
Average
Protocol Code Quality
Protocol Maturity
Protocol Design
Summary
What we like
The team at Olympus innovated the concept of the bonding mechanism to support its decentralized, free-floating reserve currency that is backed by its treasury assets.
What we like less
The protocol can be highly reflexive as the OHM token has no real utility and holders are continuously diluted through its rebasing mechanism.
What it means for you
Offers you a reserve asset that is non-pegged to USD (always backed by at least one DAI) with its value tied to its basket of treasury assets.
Information
Exploit/Hacks
One
Info
Key Metrics
  • TVL: $0 (Rank #229)
  • TVL Ranking by Other: #0
  • Blockchain: Ethereum
  • Chain TVL
    • Ethereum: $0
Risk Assessment
Average
Protocol Code Quality
  • Code reviewed by several experienced auditors including PeckShield and Omniscia
  • Anonymous team reduces transparency
  • One mitigated protocol hack since launch
Protocol Maturity
  • Latest protocol version launched in 2022; maturity over one year minimizes technical risk as smart contracts are well battle-tested
  • Top 5% by total value locked reduces risk
  • Multisig wallet controls protocol upgrades
  • Multisig consists of at least 4 signers, which means the protocol is less susceptible to centralization risks
  • No timelock exists or no information documented, which mean a malicious actor could approve upgrades without any delay
  • Low voting power concentration reduces risk
Protocol Design
  • Protocol is highly susceptible to death spirals
  • This protocol is susceptible to risks related to yield optimizers which deploy custom strategies to automatically manage user funds
  • Olympus pioneered the concept of ""rebasing tokens"", which means a user`s holdings of the OHM token increases automatically over time; yield is paid by issuing more OHM tokens (inflation), and the value of the token is akin to a share of a mutual fund and valued at Net Asset Value or Net Treasury holdings
Things to know about Olympus

How Olympus works

Olympus DAO popularized the concept of "protocol-owned liquidity" (POL). The protocol achieves this through its bonding mechanism and staking rewards to control supply expansion. Olympus controls the OHM supply by growing its treasury through bond sales and liquidity provider (LP) fees. The treasury will grow when users buy the bonds or LP tokens available on the platform. Bonding is the process of users buying discounted OHM offered by Olympus in exchange for reserve assets such as DAI, FRAX, LUSD, as well as LP tokens (i.e. OHM-DAI). The purpose of the bonding mechanism is to reduce the liquidity of OHM in other exchanges by limiting the bonding user with a lock-up period of five days, which prevents users from instantly selling the discounted OHM for a risk-free arbitrage. Staking involves users staking OHM into the Olympus treasury to receive rebasing rewards. As OHM's floor price is pegged to DAI, Olympus will mint or burn OHM based on its value relative to DAI. When OHM's value is above 1 DAI, the protocol views that as demand for OHM and will continuously mint OHM as staking rewards and sell them through the bonding process. If OHM is below 1 DAI, the protocol will continuously buy OHM and burn it until all sellers are depleted.

How Olympus makes money

Olympus issues bonds to raise money and earns trading fees from its POL. Since Olympus owns the majority of its liquidity, all trading fees are earned by the protocol itself to improve its treasury reserve. The protocol also generates additional yield with its treasury assets by deploying it to support partner projects and various farming strategies.

How you make money on Olympus

You can generate yield by staking OHM on the platform to earn rebase rewards over time. You can also leverage the bonding mechanism to buy OHM at a discount in exchange for its treasury assets.