Olympus DAO: Everything You Need to Know

How Does It Work?

Olympus DAO is built around a multi-signature wallet that safeguards the system’s treasury assets. Elected guardians manage this wallet, overseeing treasury operations and executing decisions made by the DAO. Olympus DAO leverages smart contract-enforced rules to prevent manipulation and malicious activities within the protocol.

To ensure strong decentralization, all Olympus DAO members can submit proposals and vote through an off-chain voting mechanism. Proposals must reach a minimum approval threshold before they are enacted within the protocol.

Olympus aims to deliver an open, transparent, and policy-driven platform that maximizes stability while empowering users with control over their assets. The team believes this approach positions OHM as a stable and widely adopted medium of exchange.

Role of Reserve Currencies

Reserve currencies are intended to deliver deep liquidity, serve as reliable units of account, and preserve purchasing power over time.

They provide low-volatility assets that can be seamlessly exchanged for other assets, goods, and services. This stability helps ensure other assets are denominated consistently and purchasing power is maintained across medium- to long-term horizons.

With this objective, Olympus DAO has implemented treasury management strategies and on-chain governance structures to further reinforce OHM’s stability. Ultimately, these measures support the expansion of the Olympus network economy.

OHM Stablecoin

Stablecoins have become a cornerstone of Web3 because of their ability to maintain value stability even during extreme market volatility.

For users transacting with assets like Bitcoin and Ethereum, the expectation of price stability is common—many assume their purchasing power will remain consistent from one day to the next.

However, this perception is largely inaccurate, as a currency pegged to the US dollar is still subject to the policies of the US government and the Federal Reserve. Olympus addresses this by introducing OHM—a non-pegged reserve currency engineered to break Web3’s reliance on centralized financial assets.

OHM leverages its treasury reserves to counteract market swings and extend its economic reach across various industries, driving both stability and ecosystem growth.

Although OHM is not a traditional stablecoin, it is designed to fulfill many of the same functions. Olympus seeks to create an asset with built-in protection for purchasing power, deep ecosystem liquidity, and robust utility as a unit of account. The protocol also aims to provide trusted collateral for other decentralized digital assets in Web3.

OHM represents an innovative protocol that backs rather than pegs its value. Every OHM in the treasury is supported by at least $1 in assets, eliminating the ceiling imposed by price pegs. To maintain this alignment, the protocol purchases and burns OHM when market prices fall below the $1 backing threshold, pushing prices above $1 and incentivizing holders. In contrast, a pegged currency remains fixed at $1 regardless of demand. OHM empowers investors with dynamic pricing and flexible entry and exit points for their positions.

Olympus Monetary Policy

Olympus DAO actively manages the OHM token supply to maintain value over time. It implements monetary policies—including inflation and deflation targets, reserve requirements, and capital controls—to promote currency stability and reliability.

This strategy helps users maintain confidence that their purchasing power will hold steady, even amid changing market conditions.

Beyond supply management, Olympus DAO sets on-chain transaction fees, which fund ecosystem projects and cover network operating costs. By accurately accounting for usage, Olympus ensures sufficient operational funding while also rewarding users who participate in governance.

The DAO enforces minimum voting thresholds for any policy changes, safeguarding the protocol from unauthorized influence and ensuring that only proposals with substantial community support are adopted.

Olympus’s vision is to enable an open monetary system where users retain authority over asset management and usage, while maintaining the security and stability essential for long-term success.

To achieve these goals, the DAO employs two primary mechanisms: pledge and bonding.

Pledge

Through pledging, OHM holders lock their share of the total token supply, agreeing to regulate issuance and mitigate potential price declines caused by token volatility.

Pledgers receive sOHM rewards, collecting 90% of all income generated by treasury assets. OHM rewards are distributed every eight hours, and participants’ sOHM balances adjust to reflect newly issued tokens.

Bonding

Bonding is core to Olympus’s operations, enabling users to exchange their assets for discounted OHM. Initially limited to OHM-DAI and OHM-FRAX LP token bonds, the program now accepts all stablecoins. Increased bonding expands the treasury, facilitates additional OHM issuance, and boosts yields for participants. The five-day vesting period motivates users to continue engaging with Olympus’s bonding services as they realize higher-than-expected rewards.

Olympus Pro

Olympus Pro offers a groundbreaking framework for sustainable, decentralized economies, allowing third parties to participate in yield farming and related initiatives. The platform delivers a suite of services designed to help protocols unlock their potential by providing liquidity-as-a-service with low overhead and seamless investment access on the Olympus platform.

With robust infrastructure, domain expertise, and enhanced exposure, Olympus Pro delivers a trusted solution for tokenizing bonds within its emission model, enabling clients to mine liquidity with minimal user intervention. This empowers protocols to construct resilient, scalable systems that attract investment from across the ecosystem.

Olympus Pro equips projects with the tools to generate proprietary liquidity and drive value growth, offering a vital alternative to expensive protocols that impose premium fees for liquidity access.

Clients enjoy unparalleled flexibility in designing tokenomics structures—customizing bond terms to fit project needs and freeing up resources to focus on core product innovation. Olympus Pro empowers projects to strengthen their financial models and maximize returns for all participants.

Governance

Olympus stands out for its innovative governance model; monetary policy decisions are made by holders of the primary currency itself, not by secondary governance token holders (as with DAI, FEI, and RAI) or those of centralized stablecoins (such as USDC and USDT). This approach broadens community participation and reduces risks associated with governance token turnover, helping explain the strong enthusiasm among many OHM holders.

Conclusion

Olympus is an ambitious initiative aiming to establish a decentralized reserve currency protocol with OHM as its foundational asset. By backing every OHM with a diversified asset basket and equipping users with tools to self-regulate monetary policy, Olympus aspires to serve as a reliable store of value for a global audience. The pledge and bonding mechanisms enable users to capitalize on dynamic pricing and achieve higher yields than conventional stablecoins. As Olympus continues to evolve, its journey toward becoming a global financial platform will be one to watch closely.

FAQ

What is Olympus DAO, and how does it differ from other DeFi projects?

Olympus DAO is a decentralized autonomous organization that allows users to purchase liquidity directly rather than rent it. This distinctive mechanism gives participants more control and potentially higher returns compared to traditional DeFi protocols.

What is the purpose of the OHM token, and how can you participate in Olympus DAO through bonds?

OHM is Olympus DAO’s core asset, rewarding active participants. Bonds enable the DAO to acquire liquidity by offering OHM at a discount in exchange for assets such as LUSD. Participation involves buying bonds and supporting the protocol’s growth.

What are Olympus DAO’s revenue sources, and what returns can you expect from staking?

Olympus DAO primarily generates revenue through OHM staking, delivering APY yields exceeding 10,000%. This high-return structure makes it an appealing choice for DeFi investors in DeFi.

What are the primary risks facing Olympus DAO, and why is it considered a high-risk investment?

Olympus DAO carries high risk due to market volatility, large-holder (whale) dynamics, and complex tokenomics. Its assets are vulnerable to sharp price swings, liquidation threats, and the risk of collapse if bond demand drops.

How can you buy OHM tokens? What wallet and exchange do you need?

To buy OHM, use a Solana-compatible wallet such as OKX Web3 Wallet. Deposit SOL to cover network fees and purchase OHM directly on supported exchanges. SOL is required for both transaction and network costs.

What comprises Olympus DAO’s reserve assets, and why is this significant?

Olympus DAO’s reserve assets are composed of crypto holdings valued at over $200 million. These reserves underpin OHM’s stability and value, serving as the foundation of the ecosystem and fortifying the protocol’s resilience.