OHM, BTRFLY, and the pursuit of CRV
[REDACTED] is a protocol that is using OHM mechanics to participate in the quietly waged Curve wars. In this article, I will give a summary of OHM and CRV, and explore how [REDACTED] is combining them.
OHM
OlympusDAO is the most interesting economic experiment we have seen in recent years. Its use and memeing of the Nash Equilibrium, (3,3), has been a unique and successful approach to demanding both social and financial attention.
A short history of OHM:
OlympusDAO was launched in May 2021 by pseudonymous founders, namely Zeus, a somewhat outspoken individual who is theorised by most to be 14 years old. (Probably not true, unless said 14 year old has the voice of a grown man!)
OHM aims to be a ‘decentralised reserve currency’ whose behaviour is closely monitored and controlled by its DAO. Their thesis is that this will optimise the stability and consistency of OHM in the long term, whilst creating efficient growth and wealth in the short term.
So far, they have really proven themselves right; currently, OHM’s index is 57, meaning if you bought 1 OHM and staked it on launch you would now have 57 (around $170k at time of writing).
As a degen might say, ‘number goes brrrrrrr’.
Each OHM token is ‘backed’ by 1 DAI (a stable coin == $1). Unlike a pegged coin OHM’s price can rise above its backed value, allowing for price discovery and a premium on its intrinsic value.
How does OHM provide tokens to its users?
Bond sales generate profit for the treasury and are used to mint x OHM at a cost of x DAI. Effectively, minting 1 OHM turns $1 of bonding profit into the current market price of OHM.
Crazy right!
This works for a couple of reasons, but to give one overarching factor; the DAO acts in the DAOs best interests. Minting 1x10^100 OHM and bringing the price of OHM crashing down to $1 does not benefit the DAO.
Policy is implemented in a manner that creates the most beneficial outcome for the protocol/DAO.
The novel concept of OHM/OHM forks for users is the choice of whether to stake or bond in order to participate in the ecosystem.
Staking is the simplest choice; just buy OHM, sign 2 transactions, and collect those sweet rebases. Every 8 hours, stakers receive a 0.3655% return on their staked tokens (at the time of writing).
This compounds. Hopefully, that explains some of the crazy numbers you see surrounding OHM forks.
The second choice a user can make is bonding. Bonding allows users to purchase OHM at a discount and takes 5 days to fully vest. This is OHM’s main innovation, as it provides the protocol itself with liquidity, in a process they have coined POL (protocol owned liquidity).
This provides several benefits:
- Olympus doesn’t have to pay farming rewards to liquidity providers
- Liquidity is guaranteed for transactions
- They earn revenue through LP fees
The innovation and popularisation of OlympusDAO has led to numerous copycats referred to as ‘OHM forks’, as the code is ‘forked’ straight from OlympusDAO’s smart contracts.
[REDACTED] is one such fork.
For a comprehensive education on OlympusDAO, visit their documentation;
https://docs.olympusdao.finance/main/
CRV
The Curve ecosystem has also captured the attention of DeFi users in 2021, and is the single most important protocol within DeFi; $20 billion TVL (total value locked)is nothing to scoff at.
It is also the largest AMM (automated market maker) in DeFi, which means it will probably stay that way. To put it simply:
Largest AMM → Deepest available liquidity → Best pegging → More stable coins and users → Largest AMM
It’s a never-ending cycle that Curve has captured and now benefits from massively.
I recommend knower’s excellent article about the ‘Curve wars’ to familiarise yourself with it;
https://theknower.substack.com/p/the-mythos-of-curve-finance
TLDR: Everyone wants a slice of the CRV pie for various reasons, but presently, the goal is to get the most traffic possible directed towards their coin.
BTRFLY
[REDACTED] is OlympusDAO’s first official fork as per OIP-46, although I’d suggest that’s a little insulting to the butterflies. [REDACTED] have taken OHM’s bonding and staking mechanics and transformed them into a ‘recruiting tool’ for the fastest rising army in the Curve wars.
It works surprisingly simply:
Users bond their tokens (CRV, CVX, and potentially a new token. Clue, it has tentacles) for BTRFLY, which can be staked for rebasing goodies ala OlympusDAO’s mechanics, albeit with a much higher APY.
Degens chase numbers. Why stake your CRV for measly single-digit APYs, when you can give it to [REDACTED] for 160,000% APY?
[REDACTED]’s innovation on the OHM model is how it is using its treasury. Whereas OlympusDAO aims to become a stable and consistent reserve currency, [REDACTED] aims to grow, grow, and grow some more.
Caterpillar → BTFLY
In mid-December [REDACTED] launched ‘Operation: Swallowtail‘, a treasury bootstrapping event done through a dutch auction. This raised an impressive $73,267,961 in OHM, CRV and CVX tokens.
The next step was to deploy these assets in order to further grow the treasury. On the 22nd, they deployed $25M of CRV into cvxCRV and the cvxCRV/CRV factory pool. This is netting them >$35k a day in CRV tokens.
$28M in CVX has also been locked up for Votium use, giving the treasury a revenue of around $105k daily in bribes.
That’s $140k a day, $980k a week, $3.9M a month.
What. The. Fuck.
I hope that’s FOMO I smell, anon.
This increase in treasury size should in theory cause an appreciation of BTRFLY, providing incentives to stake beyond just rebases.
And, as always, compounding is a thing. The more these strategies grow the treasury, the more the treasury can grow these strategies.
Hopefully, the potential of this protocol is becoming clearer and clearer. In a meta way, staking BTRFLY is being long on the CRV and CVX.
Another reason to be bullish on BTRFLY is InformationTokenDAO’s involvement in the project.
InfoTokenDAO is a community of the biggest brains in crypto. This is empirical; GCR is a member :p
They are advising internal and external policy for [REDACTED], and imo will do a damn good job at it.
Good policy decisions are partly what made OlympusDAO what it is today. It is a criminally underrated factor during the comparison and analysis of OHM forks.
[REDACTED] is not coming lacking on that front.
Conclusion
At the start of this article, I called OlympusDAO the most interesting economic experiment of recent years. I think it might struggle in its title bout against [REDACTED] in 2022.
Time will tell where these protocols go, and how the Curve wars will be waged in new and more innovative ways.
Until then, grab some popcorn and enjoy the show. [REDACTED] is all out of bubblegum.
Olympus：重新定义货币价值？OHM机制分析
Olympus致力于打造一个锚定一篮子虚拟货币、自然增长的区块链生态指数；特殊的支持而非锚定机制为高溢价提供了可压缩的巨幅空间，高通胀压制流通盘引导用户与协议进行利益绑定，为协议的长期发展提供保障；资金进入Olympus协议后不断沉淀、反哺，促进协议成长的同时也共享了协议收入。
（1）扒官网
老规矩，我不会用些难懂的词汇，全是大白话，咱们先来深扒下官网和docs。这部分废话多，不喜或者已对项目有了解的朋友可以直接跳至第三部分。
愿景：构建一个社区所有、去中心化的财务结构，给世界带来更多的稳定性和透明度。
olympus是希腊神话中的奥林匹斯众神，官网沉稳大气、磨砂陶土质感配合云雾若隐若现的透明感的UI设计，以及首页这个神庙很好地奠定了项目的调性，完全符合“stability”和“transparency”两个特性。让人直呼妙啊……
看看项目怎么工作的：
1、“金库”用以自动锁定流动性、控制OHM代币供应。金库来源为LP费用以及债券销售。这个债券暂时不清楚是什么。
2、接着上一点，金库抵押支持OHM，同时根据模型调整APY。
3、****-compounding。自动耕作池就是收益不能手动提取自动转化为代币，也就是说，进去是OHM出来还是OHM，数量多了而已。
APY目前是在4000%上下波动，假设一天复利一次，这个APY大概是APR440%左右，也就是一天1.2%左右。据他这里所说，所有质押奖励的OHM都有金库支持，而金库来源是bond sale和LP费用，粗推新钱进来的速度快OHM就涨价，新钱进来慢OHM就跌。当然，这个快慢的定义是根据恐怖的APY锚定的，具体第二部分再说。
这是他的APY变化图：
接下来团队放出了一段关于货币价值存储的观点：
意思是，法币由于通胀而太脆弱，BTC/ETH受到市场波动以及市场操控的影响，都不算是真正的价值储存的方式。
其实我思考过经济发展、财富增长与货币发行之间的关系，这里不细说了。
关于价值储存的方式我自己的观点是：价值一定是储存于“物”之中，如果“物”用来交换，则有了供需，进而有了价格；货币是价格的代言人，锚定于“物”之上。所以任何货币的确都不是价值储存的方式，但货币又可以用于价值储存，因为可以靠共识锚定于“物”之上。共识何处来呢？法币的共识来源于国家权力，BTC/ETH共识来源于使用场景和对去中心化纯粹的信心（事实上，支撑BTC信心的共识很大一部分来自于ETH智能合约带来的使用场景和生态，富余的BTC则类似于宗教）。
团队既然这么说了，言下之意，他们试图打造真正的价值储存的方式。以我的观点看这肯定是不可行的，但如果能达到法币/BTC等的效果，也算可以达到教科书概念里的“价值储存”了吧。
这里是说，OHM可以平滑市场波动，达到“自然增长”的效果。可以看出，团队其实是看透货币的意义所在的，“自然增长”的确是一个现有任何货币机制都难以达到的目标。能否达到我们再看吧。
金库拥有代币几乎所有的流动性。为什么呢？其实前面已经有答案了：高APY的自动耕作池，其实就是反向逼迫用户把手中的OHM代币质押进去。假设这是一个没有新资金流入的池子，总量恒定，金库池子却在不断生产OHM代币，那么OHM一定会通胀贬值，你不质押，就等着看自己的钱贬值直到灰飞烟灭，想想津巴布韦；同时，池子里的钱该是多少还是多少，甚至因为那些不被质押的人手中货币价值的损失而获得均分的收益（无新资金流入的假设条件下池子内是零和博弈）。所以均衡状态一定是所有代币持有者把手中的OHM代币投入金库自动耕作。只有那些用于交易需要获取流动性的会把OHM卖出来，短期的抛压造成币价波动，等到有接受币价的新资金进入，又继续去自动耕作了。这也是团队为什么敢在官网放上99.5%这个数字的原因所在了。
官网首页划到这里结束了，打开第三页stake会跳转到：
这里有个LUSD，是一个叫liquidity的团队出的稳定币：
110%超额抵押ETH生成，可以用LUSD抵押获取项目代币LQTY的收益，抵押LQTY又可以获得liquidity协议的收入，包括LUSD形式的发行费、ETH形式的赎回费。这么看似乎整个协议的收入都用来支撑LQTY的价值了。
暂不清楚OHM和LUSD的联系，难道是随便找的一个稳定币？通过对比不同稳定币的详细机制应该能找到答案，可惜太耗费精力，咱们先把这个问题撇一边。
官网第四页是bond，可以看出他这些债券就是我们常说的LP，现在OHM可以直接买也可以通过买LP持有了。这里也有DAI、FRAX其他算稳币，可能stake里的LUSD真的没啥特殊目的……
为什么可以把LP对看作是债券呢？
我们回想一下债券的流通过程。假设一张100元面值的债券，使用法币96元折价购买，到期按面值赎回，这4元就是债券支付的利息。这期间如果有利率波动，二级市场的债券可能就是95元或者97元。
回到Olympus，LP对是债券，法币则是OHM。用户用ETH等价值资产换取OHM购买债券（添加流动性了），假设100刀的LP，其中50刀是OHM，50刀是DAI，按照“自然增长”的设计，债券的票面利率等于自然通胀率，假设折价成98刀出售了。结果OHM下跌20%，原来价值100刀的LP对现在价值90刀了，现在二级市场上LP对可能只需88刀，但赎回的时候还是按面值100刀赎回的，差值12刀哪里来？应该就是LP产出的OHM代币。同理，若OHM上涨，赎回时多余的OHM或许会补充金库？
这纯属我的推测，具体待会docs应该会有。
说完债券说回官网第二页，第二页是olympus pro，
以看到是ETH LP，这部分参考bond部分，就是用债券形式把LP收益平稳化了，抹平波动的角色推测是由OHM担当，相当于把OHM的“领地”扩大了，是其“一统天下”迈出的第一步。
值得一提的是，olympus如此大的TBL（官方换词了，其实就是TVL），协议收入一大把比如sushi，按照规定是流入了金库，成为对OHM的支持。官网就到这里，再详细看看docs。