It may not be quite a Hail Mary, but the OlympusDAO community is voting on whether to deploy the project’s Protocol-Owned Liquidity for its new Inverse Bonds product.
OlympusDAO burst onto the scene in April 2021 and immediately raised eyebrows with its aggressive token emission schedule for stakers. While the price of its native OHM token rallied more than $1,300 between May and October, a spate of controversy, including allegations it was a ponzi scheme, poleaxed its value by 98%; OHM now trades at only $28.
Reserve Assets
Now, the protocol is hoping that a new product may reignite demand for OHM.
Olympus’s original bond product allowed the protocol to acquire reserve assets and liquidity by selling OHM tokens in exchange for other assets. Although an effective means to accrue assets for its treasury, the product drove bearish selling pressure on the price of OHM as arbitrageurs sought to take advantage of the discount available.
By contrast, inverse bonds are designed to allow OHM holders to sell their tokens back to the protocol in exchange for treasury assets. The idea is the inverse bonds will push prices to meet a 120-day moving average, and potentially drive up OHM’s price from its current levels. OHM that is removed from liquidity will also be burned.
OlympusDAO Created a Breakthrough DeFi Model – Now It’s Down 93% and Called a ‘Ponzi’
Olympus writes that the introduction of inverse bonds would mean the protocol will “effectively buy OHM at a premium”…
