Olympus DAO: Part 3
Sitting On the Moon with Greek Gods
Grant Invests
Without a background in Olympus, this will be confusing. However, if you do decide to venture down the rabbit hole, congratulations you might be an ohmie or you might just be a gambling degenerate intrigued by big numbers looking to punt off their next 10g’s. BlueAlpha and I welcome you either way.
DeFi 2.0 has just started to get some recognition in the last two months. I know in crypto that is a lifetime. But, there is a lot of runway for projects like Olympus DAO.
BlueAlpha has gone over some of our beliefs about the OHM in other articles.
In this article, I will go over:
1) Bonds and how bond sales effect RFV
2) RFV data presented on Dune and what that might mean for OHM’s market cap in 6 months
3) BlueAlpha shares some final thoughts
Bonding (1,1) is the mechanism that Olympus uses to purchase liquidity at a fixed cost and earn LP rewards in the future. Quoting directly from the whitepaper, “Bonds allow users to buy OHM from the protocol at a discount by trading it with i) liquidity (LP tokens) or ii) other assets. The former is called liquidity bonds and the latter reserve bonds. Bonds take roughly 15 epochs to vest, and OHM tokens are vested linearly to the user over that period. Liquidity bonds help the protocol to accumulate and lock liquidity, while reserve bonds allow the protocol to grow its treasury, and thus its RFV (risk-free value) faster.” (https://docs.olympusdao.finance/main/using-the-website/bonds)
Risk-free value (RFV) is the value Olympus has marked its assets down to. This is to guarantee that every OHM in circulation is backed. With every OHM token backed by 1 stablecoin or RFV we can associate a future revenue stream per OHM. This is the beauty of OHM owning its liquidity.
I will provide a range of outcomes for the future RFV of OHM. As investors in OHM, we consider RFV the most valuable and conservative metric to estimate future returns delivered by the protocol.
Treasury RFV Forecast: 95% Confidence out to 6/29/2022
Current RFV (11/9/2021): $169,630,023
RFV Forecast: $271,044,418
Upper Band: $738,580,990
Lower Band: $0 (The project can go to zero... we think this is very unlikely)
So what does this mean for the market cap of OHM? Well, the past Market Cap/Treasury RFV multiple has been between 10 - 30 times. You can find this metric on Twitter. Thanks@ohmzeus! So based on the forecasted RFV we can see the market cap range of OHM.
With a current market cap of $3.8 Billion, we would estimate in 6 months the market cap will be between $2.5 Billion and $7 Billion. On a per OHM basis, I estimate a price range of $595 - $1690. So let’s look at how these scenarios play out with a constant reward rate.
Scenario 1: Roughly $2.5 Billion Market Cap
Scenario 2: Roughly $7 Billion Market Cap
Based on the price range and current reward rate, an investor in OHM can expect a return of 400% - 1400% in 180 days. Ohmies are an amazing community that are willing to make sacrifices in the short-run to benefit the long-run viability of the DAO. This means that permanent capital loss is unlikely. Not to mention OHM provides an amazing risk/reward opportunity. Maybe it is worth reading the whitepaper….
Final Thoughts
BlueAlpha
While the world of "Decentralized Autonomous Organizations" and DeFi itself is in its early stages of development, Olympus DAO continues to impress with both its level of commitment from its policymakers and the community alike. They continue to add value to the project by beefing up its security, educating members, and making sound decisions together.
Now I'm sure your Grampy's favorite basket of investments would certainly exclude DeFi as a whole. But that man was prolly a straight-up gentleman, and you, my dear friends, are likely degenerates.
Allocating capital to projects in DeFi is always accompanied by excess feelings of discomfort and uncertainty.
GOOD! It should be unfuckingcomfortable. That's how we grow.
Grammarly. look at me, look at me, it's a word now.
All we can do is research where we should best spend our time and energy to create valuable output. You have a job to do.
DeFi offers people opportunities usually reserved for Venture Capitalists, if you understand what that means, OHM makes perfect sense. The barrier in this space is no longer exclusively who you know, it's not requiring a certain size of “liquid net worth” to invest alongside “smart money”. The barrier for entry is literally your cell phone. Fuck where you went to school - it’s largely irrelevant in this space.
I think it's important to categorize what Olympus is and what it isn't. I do not see this project as a short-term trade. I see it as a long-term position where I am rewarded in a transparent manner relative to my time “staked”.
As the “ohmies” say, “Time in OHM > Timing OHM”.
While the future of this project is uncertain, I look forward to seeing Olympus DAO and DeFi as a whole evolve from here for better or worse.
 | A guest post by
|