While everyone is gung ho about getting in on OHM forks. I’m actually quite impressed with what OlympusDao has been rolling out and it could be catastrophic to the less innovative forks, particularly those on EVM chains like Avalanche, Fantom, Moonriver etc.
Why should we be bullish on OlympusDao?
Launch of gOHM token across other chains
This allows users from other protocols to participate in owning staked OHM while also participating in other yield opportunities without having to stake OHM.
The price of gOHM is simply determined by the multiplication of the curent OHM Index and the OHM market price. The OHM Index is basically a way to track how much staked OHM (sOHM) you’d have if you staked & held 1 OHM since the launch of the protocol. So at the moment 1 gOHM is equivalent to 40.948 sOHM. The current price of gOHM is $28,862.
So gOHM becomes convenient if you don’t want to interact with Ethereum due to the high gas fees but you’d like to have a stake in OHM without getting diluted.
At the moment for example you can purchase gOHM from Traderjoe and deposit it in a gOHM-AVAX liquidity pool or continue to farm it for further rewards. This was made possible by a liquidity incentive program launched by OlympusDao themselves.Launch of Olympus Pro
The gist is Olympus Pro is Bonding-as-a-Service from OlympusDao to any other protocol that wants to raise and own liquidity in more sustainable way. In DeFi 1.0 it was primarily about renting liquidity, almost functioning more like a middle man, but with DeFi 2.0 the trend is moving towards having protocols own that liquidity and often times letting that liquidity generate more income for them from a treasury perspective.
OlympusDao is betting that more protocols will want to raise liquidity in this manner of issuing bonds in exchange for their tokens at a slight discount and they will act as a de facto service provider for this bonding infrastructure.
Here’s links to the primary articles and documentation:
Introducing Olympus ProA Beginner’s Guide to Navigating Olympus Pro
Olympus Pro DocumentationLaunch of the Incubator Program
The idea here is that OlympusDao can help incubate new protocols and this in turn will end up using more OHM within their products thus growing the ecosystem further. The startup takes OHM in exchange for tokens that OlympusDao will hold in its treasury.The Olympus Incubator is proud to announce its first launch partner: ⚡ Volt: a floating price stablecoin backed by collateral assets. We're joining forces to help them with liquidity ownership! To learn more, join our AMA with founder OneTrueKirk on Nov 22 at 3PM PST.
Here’s a link to the primary proposal:
So in summary OlympusDao is going multi-chain swiftly to capture liquidity & market share while at the same time providing critical bonding-as-a-service infrastructure to partners and launching newer protocols that utilize OHM. What you see here is the proliferation of the application of OHM potentially as a new DeFi reserve currency.
What about the OHM forks?
OHM forks should definitely be worried, especially those on EVM chains. They probably wouldn’t be able to build out the extent of infrastructure that OlympusDao is already able to provide and applications in those chains might already be utilizing OHM paired bonds as opposed to utilizing tokens from the fork. It’s clear that OlympusDao has a clear game-plan on how to deal with the forks.
Some forks would probably have to bow down to pressure from OlympusDao by accepting their gOHM as part of their treasury and this is already apparent with RomeDao:
The co-founder himself issued a veiled threat that you’re either adding value to OHM or you’re NGMI:
In the medium to long term I would be worried if I was an OHM fork on an EVM chain because of the pressure that liquidity flows to OHM vs my fork. As a token holder I might already be channeling some liquidity from the fork to build up an OHM position.
Out of all the OHM forks InvictusDao may be the only one that might be able to capitalize on the advantages & moat surrounding Solana. It’s already doing it by offering dynamic rebasing which even OlympusDao is not able to offer it. And they’re already hinting at launching something similar to Olympus Pro:
If InvictusDao can pull this off then you may end up seeing OlympusDao dominant in ETH and EVM ecosystems while InvictusDao being dominant in the Solana ecosystem. I do think there’s a higher chance InvictusDao starts accepting OHM as part of it’s treasury than vice versa.
Recommendations
If you’re early in an OHM fork then you’re still in a decent position but it’s probably a good risk mitigation strategy to start building up a position in OHM (gOHM if you don’t want to mess with ETH) if you believe in the notion of a treasury backed reserve currency. I think if you’re holding an OHM fork on an EVM chain you’re on a shorter expiry date.
I’m also willing to acknowledge that in DeFi the future is highly uncertain. These are just my assumptions from extrapolation which is really all you can do because one action from the regulators can make everything crumble (except BTC because it’s more de-risked as an asset in comparison to DeFi assets). I’m always up for learning and discussing more so feel free to hop into our Discord.
Note:
Any views expressed in the post are the personal views of the author and should not form the basis for making investment decisions, nor be construed as a recommendation or advice to engage in investment transactions.
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