We are used to seeing big tokens such as Bitcoin and Ethereum on the top when it comes to trading volumes on the different exchanges. That is what makes many people raise their eyebrows when they see that OlympusDAO ($OHM) is on the top when it comes to trading volume on SushiSwap. And we all know that SushiSwap isn’t a tiny exchange with low volume. Rather the opposite. Yesterday, the decentralized exchange had a total trading volume surpassing $350,000,000. And more than 14% of that volume came from the OHM/DAI trading pair. That makes you ask yourself – what is OlympusDAO all about?
Maybe you are asking yourself the question, what is OlympusDAO all about? Maybe you have already visited their website and you have seen that they offer an APY above 7000% at the moment. That might make you even more suspicious. After all, Bitconnect managed to become the 12th biggest cryptocurrency in the world back in 2017, so trading volume and popularity don’t have to legalize and make crypto valid.
So, let us take a closer look at OlympusDAO in this article, and I hope you will feel smarter once you have read the article! I also encourage you to take a look at the following articles that we have written earlier here in the IP Address Guide.
- Is OlympusDAO a good investment?
- What is $TIME (Wonderland), the forked version of OlympusDAO running on the Avalanche blockchain?
OlympusDAO might sound like a tough product to understand, but it isn’t that hard to grasp if someone explains it to you in an easy and understandable way. So, let me give it a try, and hopefully, you will understand the concept of the project.
OlympusDAO has a goal of being a stablecoin. This immediately raises the question – then why isn’t the price $1 or very close to $1?
OlympusDAO has a brilliant concept. They are selling so-called bonds. These bonds will give you a discounted price on the $OHM token. And whenever you purchase a bond at the website, you are adding money to the OlympusDAO treasury. In other words, you give your money and give them to the OlympusDAO treasury/vault, and you receive OHM tokens in return.
Whenever someone buys a bond, the value of the treasury is growing.
At the time of writing, there is $58,000,000 in the OHM treasury, securing the value of the OHM token. What does this mean? The current circulating supply of OHM tokens is 2,300,000. If you divide the first number with the second number, you will get the following number: $25. What is that number? That is the value of the OHM token backed by the treasury. In other words, the price cannot fall much below that, because if it would, then the treasury would start purchasing tokens in order to keep the price stable.
That makes it interesting. OlympusDAO is an algorithmic reserve currency backed by other decentralized assets, not pegged to the Dollar, but to its own treasury. Currently, the floor level is at $25.
If the backed value is $25, then why are people buying at at $900?
That is a good question. People are buying it, because they believe in the project and because they want to be a part of the fantastic APY. Just think about it, if you buy today and stake your tokens for one year, then you will enjoy an APY of near 7000%. Even if the price should fall to $200, you will still be in a gigantic plus in one year from now. Instead of waiting, people are jumping on the train as they do not want to miss out on the project.
What if the team should pull the plug? And, I forget to ask – who is in the team?
There is always a danger when dealing with finances, not only in cryptocurrencies but also in the “normal” world. Can you imagine what those who had invested in Evergrande in China feel like when the biggest real estate company in the company might be about to go bankrupt? There is always a danger when investing money, and I have no guarantee at all that OlympusDAO will be around in one year from now. That is why I never like to tell friends or family to invest in this or other projects, simply because I cannot guarantee them anything. It is one thing to mess around with my own money, but causing trouble for others, I don’t like to do that.
The OlympusDAO team is anonymous, but they are very active in the community on Discord, and they are also regularly writing and posting on Twitter. This doesn’t guarantee a thing, but this has got to be one of the most vibrant crypto communities out there. Once again, this doesn’t give us any guarantees, but it helps give you the feeling that this is something!
It should also be mentioned that the idea behind OlympusDAO is actually quite brilliant and smart. The people behind the coding and the protocol must have big experience in the financial world, and this isn’t just a fork created by someone of another project. Other projects are forking OlympusDAO (using the same code), but this is the number one, the original, the pioneer, and they keep developing it all the time and adding new partnerships, which adds credibility to the project in my eyes!
So, should I invest in OlympusDAO or not?
I don’t want to give you an answer to that question. But, I know what I would have done. If I had $100 that I wouldn’t mind losing, then I would for sure invest it in OlympusDAO. Do not forget, the project runs on Ethereum, meaning that you also need a wallet with some Ethereum in it to pay for transaction fees, trading fees and more. Don’t spend more than you can allow yourself to lose, but if you have money that you could afford to lose, this is a great project with great potential, that might give you back 100x the amount you have invested in one year from now!
Would you like to read about other platforms where you can earn passive income? Or maybe you want to run a node and play games with GalaGames at the same time? Look around here in the IP Address Guide for more crypto-related articles that might catch your interest!