As you know and as we always say, DeFI is in an exploratory phase. It is a giant laboratory where many experiments are carried out.
We are often the guinea pigs because we are accommodated in advance. Even if overall we are also lucky to be able to invest upstream, we are also assailed by innovations that we have no perspective on.
Typically, this was the case with the project OlympusDAO (OHM) who wanted to launch the defi 2.0. It was experimental and in a way, it still is.
But the token has not survived the bear market since the start of 2022. This makes us ask a lot of questions even if the supporters of OlympusDao seem to remain unmoved…
We certainly still have no real perspective and we are still skeptical about the results. That said, we can nevertheless reflect on these protocols together.
Olympus DAO and Zeus the Chemist
Everyone was shaken by Zeus' plan. This was seen as an exciting innovation. The project took the basics of the prisoner's dilemma to create a protocol that is more tenable in the long term.
The only thing that surprised us all was the triple-digit APY rates. This attracted thousands of investors.
Many credible people in the crypto industry have given their accreditation. The project quickly gained popularity. On Twitter, this was almost viral with (3,3) written next to the profile NFT PFP. Then, there is a general euphoria of these projects which have copied the original OHM protocol whether it's Wonderland, Hector etc.
Many projects became more and more absurd and mind-boggling. We remember projects with projects with 5-digit APYs!
This couldn't hold of course but at the time, we wonder why so many people go there...
So there were those who thought it was a Ponzi. In fact, we in a very simple reading, when we saw such API, we also thought it was a Ponzi.
In fact, it may be more complicated than that. Likewise, we cannot deny the fact that OlympusDao has highlighted a real problem in DeFi…
The token that loses 80% of its value…And it’s guaranteed death?
Since the start of the year, the OHM token has lost more than 80% of its value. Then, very quickly, copies like $TIME (on Avalanche) followed the fall with a drop of 75%.
I remind you, we were talking about the Defi’s reserve currency. So such a fall can only make us react.
Even though at the launch, it was very difficult to see clearly in this protocol. The internal mechanism was very innovative with many "new ways of doing things. Would only be the use of tokens called rebase (elastic) and which are very mathematically complex to understand.
And, rebase tokens are just one element among a whole bunch of elements that make up the whole thing. Likewise, the reference to the prisoner's dilemma which still remains a puzzle as well. You can watch this great video from Arte on the subject.
In short, the well-oiled mechanics of Olympus Dao which remains complicated to understand and which requires further decryption is beginning to show its flaws, even imminent death.
It's hard to say and few people talk about it because the subject is so poorly understood. It must be recognized.
Is Zeus fooling himself? Is it certainly an interesting project but one that deserves an overhaul? Can protocols based on game theory really hold up in the long term? Will cooperation
It's experimental and it would be entirely possible and even logical that we need to improve it.
There are interesting things that can be kept and others that must be "jumped". That is undeniable.
Is OlympusDAO already dead?
In fact, Zeus and supporters of these protocols remain optimistic. For them, and to summarize here, the bear market reached other tokens and naturally it affected OHM and the others. Nothing to panic about. You can see the Zeus tweets here. (Zeus is the co-founder of the OlympusDAO protocol…)
Likewise, with the scandal of Wonderland (TIME), it even seems that Zeus has regained confidence.
For them, the people who cry Ponzi have always been there to point to Olympusdao and they are not going to change.
The protocol therefore continues its course, and even an announcement fell yesterday on the launch of an NFT platform for OlympusDao…
So officially the project is not dead…He even wants to come back stronger?
For us, our skepticism is at its peak, to be honest with you.
In fact, DeFi 2.0 is still being tested and there are clearly things to be done. For what? For the simple reason that the 1.0 challenge with Yield Farming also showed us its weaknesses. Yes, maybe farming is just a casino game that consists of creating new pieces from scratch...
In fact we cannot take back what OlympusDao brought. He highlighted and clearly showed the problems of first generation DeFi. He reminded everyone of the broken mechanisms and the fact that it relies on a never-ending game of incentives.
However, did he solve the solution?
Nothing is less certain...
As much as blockchain technology advances and improves, decentralized finance (because we cannot summarize blockchain as DeFi, remember) must still find its models.
In any case, we are currently preparing a more in-depth file on the issue. This requires a lot of time and careful research.
We can nevertheless recommend an article on Medium (the only one by an anonymous author): https://medium.com/@juicyarbol/olympus-has-fallen-a-postmortem-on-the-3-3-experiment- 87c316791612
The author explains why Olympus seems like a Ponzi, no matter how elaborate and clever it is…
The article also shows us that the store of value and stablecoin problem is in fact still not resolved and that OlympusDao thought it had found a path which in fact turned out to be much more complicated than what it thought it would solve…
Well, that's it for the little peregrinations on the question, we will come back with other articles on this highly important question, you will agree.
- Why are DeFi 2.0
- Understand olympusDAO
- OlympusDao Forks
Always do your own research.
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