Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Zeus: Olympus DAO – The Decentralized Reserve Currency

Episode Date: January 25, 2022

Olympus is a hotly debated project in the DeFi space. It posits to be a decentralized reserve currency protocol. Each OHM token is partially backed by the Olympus treasury, but how large the treasury is, depends on what is counted towards it. We would argue that OHM tokens should be discounted for this purpose. Users can interact with Olympus DAO through staking and bonding, which incentivizes users to deposit or sell their collateral to the Olympus treasury in return for discounted OHM tokens.We were joined by Olympus Founder Zeus to chat about why the protocol was created and how it works, and we address the debate about it being a Ponzi scheme.Topics covered in this episode:Zeus' background and how he got into cryptoWhy and how the OHM was createdBonding and staking within the protocolAPY on Olympus DAOHow Olympus would deal with a DAO runIs Olympus a Ponzi?The goals for Olympus this yearEpisode links:Olymus DAO websiteOlympus DiscordOlympus on TwitterZeus on TwitterSponsors:Tally: Tally is a new wallet for Web3 and DeFi that sees the wallet as a public good. Think of it like a community-owned alternative to MetaMask. - https://epicenter.rocks/tallycashCowSwap: CowSwap is a Meta-Dex Aggregator built by Gnosis. It taps into all on-chain liquidity - including other dex aggregators such as Paraswap, 1inch and Matcha - offering the best prices on all trades. It provides some UX perks (no gas costs for failed transactions!) and protects traders against MEV. - https://epicenter.rocks/cowswapThis episode is hosted by Friederike Ernst & Zubin Koticha. Show notes and listening options: epicenter.tv/428

Welcome to Epicentil, the show which talks about the technologies, projects, and people driving decentralization and the blockchain revolution. I'm Friedricha Ernst and I'm here with Zubin Kortizha. And today we're speaking with Zeus, who is the founder of Olympus Dow. Olympus Dow is an interesting project. It is a protocol managed treasury that some have called a Ponzi. and we will get into that in just a bit. But before we speak with Zeus about Olympus Dow, let us tell you about our sponsors this week.

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the Talley Community Edition before the Dow launches. What features are in your ideal wallet? What annoys you about your current wallet? Try Tally and join the community on Discord. Their community calls feature a new partner each week and have about 500 unique joining. All the info you need to know is at tally.cash. And our other sponsors, Cow Swap.

So Dexas are great, but they're vulnerable to problems like MEV, fair transactions and high gas costs. Cow Swap tackles these issues head-on and offers a new kind of trading experience. Built by Nosis, Cow Swap is a meta-dex aggregator. That's right, it's a Dex aggregator aggregator. It fights MEV by matching overlapping orders directly if no coincidences of want is found. That's where the cow comes from. Trades are settled on a variety of underlying on-chain AMMs, depending on which pool offers the best price. And there are news on cow swap protocol as well.

So they recently, this week, crossed the $5 billion in trading volume, and GIP 13, so NOSIS Improvement Protocol 13, moved to phase 2. And it's a proposal to spin out the cow protocol team and launch its own token. You can vote on that now. Perfect. Cool. Zeus, thank you so much for joining us. Yeah, it's great to be here. Thank you for having me. It's a pleasure. So, Zeus, obviously, you're a non. So basically, we usually ask people what they did before and how they got into crypto. So maybe you can give us like the slightly lost over version of this.

Yeah. I spent a couple years in traditional markets and then got into crypto in like early 2018. Spent some time trading. Eventually, you know, I think especially during the 2018 to 2020, like zero-sum bear market trading environment, decided that that was not really the best use of my time. But defy's summer occurred. And, you know, there's this proliferation of new ideas and, you know, like, this first real utility for smart contracts and, you know, especially on Ethereum, or pretty

much solely on Ethereum at that point. I found that fascinating. Two that stood out to me was, you know, kind of earlier in the like actual summer was Ampleforth. And the other being like the, the basis, ESD, DSD, whole wave of senior age, like stable coins. You know, I, I, I, I was especially drawn to Algo Stablecoins. You know, I kind of came in as a Bitcoin guy. I see, you know, the one of the biggest utilities of this new like blockchain technology as, you know, creation of new, uh, user owned and decentralized currencies and monies. Um, and so that was, you know, where I kind of kept most of my attention.

Um, you know, I, I kind of witnessed the, the, the. The rise and fall of all of those different experiments. It got me thinking, especially with Ampleforth and like the rebasing, where, you know, that's a pretty new phenomenon in, you know, finance in general is just the ability to, you know, unilaterally adjust supply of an asset. And, yeah, I mean, at that point, started thinking about the base concept that ended up being Olympus, tried to pull kind of the things that worked didn't work from all these various experiments and then yeah kind of you know created this persona in December um met Z prime or met Fiscontes

who ripped he was supposed to be here um unfortunate but uh yeah i mean kind of got into the swing things we launched olympus back in march and And yeah, it's been a pretty crazy year, and I'm sure we'll get into that. Cool. How would you describe Ome in a nutshell and what made you excited to build this, or how did you come up with the idea originally? Yeah, so Ome aspires to be a reserve currency. And the keyword there is currency, right? So first of all, not a hedge fund, not trying to be a hedge fund.

A lot of people have been claiming that we are, and I disagree. And I don't think that like an amount of money makes you a hedge fund just by the fault. Anyways, you know, so what I see is that we currently have several different forms of money in crypto. You know, so the most well-known ones are probably Bitcoin and Ethereum. But we don't have any actual currencies. There is a difference between the two. So the things that are held up as, you know, great for monies like Bitcoin and Ethereum, the fact that they are hard and that they're, you know, a mutable and monetary policy to at least a high degree and that they, you know, are in some part designed to appreciate indefinitely.

You know, those make for great monies. They don't make for good currencies. And what we've seen is because of that lack, there has been this hyper dollarization of the industry. So stable coins are, you know, the fastest growing asset or, yeah, like class of assets in crypto by, a large degree. You know, they make up spots like three and four on the top 10 now. You know, there's like more than 150 billion in market cap. It points to a massive market need for an actual currency in the industry. And if we don't build one that is defy-native or crypto-native, it will just be tokenizing the Tradfi equivalence. So, you know, that's the goal of home is to be that,

you know, internet native currency rather than a market. money. So how does OEM is set out to become a better form of currency than the US dollar? Yeah. So there's a couple components. One, you know, so there's this rebased mechanism in the, I'm sure that we'll talk about this more. But, you know, one of the purposes that that's meant to achieve is that you don't want your currency to be changing rapidly in value over time, or you know, pretty much at all. Like, you know, the ideal currency is going to maintain the same purchasing power indefinitely. You know, maybe some amount of inflation is good and that it pushes people to use their money and not just hoard it.

But, you know, you can just think, like, ideally flat. You know, if you have, that's difficult to balance with incentives, right? where there's this need to incentivize people to build up a new monetary network. You're going to be taking on risk that it doesn't work. You also have other opportunities that you can go and take your money to pursue. And so there needs to be some incentive to bootstrap the network. If you don't want that incentive to be price growth, then you need something to defer that price growth onto something else.

So there's this rebase mechanism that essentially gross supplies, the price can stay relatively stable where, you know, the price of home has been plus minus. I mean, it's more like somewhat volatile, but plus minus, you know, 50%, 200%, the same price since we launched. I think currently, like as of today, it's 50% below, like the initial price of the network has grown, but the price itself can remain within a consistent band where, you know, the, the, the, the, the, goal intent is that over time volatility constricts, but you know, you always have a reasonable expectation of what one own is worth. You know, and that allows you to price goods efficiently. You know, like I would point to like the biggest issue with a currency that is, you know, one volatile

or two, you know, consistently trending in a single direction is that you're constantly forcing people in the economy to update the price of their goods, right? So, if you're a company and you're trying to sell some item, and you determine based on the input costs and how much profit you're trying to take that it should go for this amount of money. And you spend a bunch of money on marketing to advertise that product to people saying cost of this amount of money. If the value of that money is constantly changing,

then you have to throw that out the window every couple months and update all of your materials saying, oh, it's actually now this price. And, you know, it produces instability within the, economy because people never have an anchor to lean on. How does this compare to other mechanisms that aim to keep stable value, but not necessarily dollar value? So an example of that would be Rye. What do you think OOM does better or differently than those? Yeah. So I mean, the difference is just that they're, you know, while we're in this very early stage of OM, there's a speculative component to it. You know,

there is upside in the growth of the network and you can take part in it. You know, like, Rye essentially took the route of let's be that currency from day one. And the issue that they've run into is that there's no incentive to grow that network or really use it. Where, you know, like the end state is, yes, you have a non-USD currency that, like, has its own monetary or independent activity. but, you know, there's been a very difficult, I think, like acquisition of user experience for them, where, like, you know, money or a currency is a network effect at the end of the day. You know, it's just a medium for people to interact with each other.

And I would see the, you know, that ultimate behavior as needing the network. effect behind it already for it to really work. Otherwise, like, yeah, I mean, it just makes it a lot harder than, you know, we are in an industry that is primarily driven by speculation, and you can either fight that or you can harness it. You know, that's kind of the difference that I would say. Is the, so it seems like you mentioned there's like a speculative component or we're in a speculative phase for OM.

Is that something that you see going away and how do you like get to a non-requent, non-specular phase. Yeah, so I see it diminishing. So a lot of this is modeled on Bitcoin, where it's not trying to replace Bitcoin. I think that there's no need to do so, but rather to take what worked for Bitcoin and apply it to something that it's not trying to do, which is money versus currency. And what we've seen with Bitcoin is that, you know, as it gets larger, you do have just natural reduction of volatility.

you do just have these things start to take form. I don't think that they will ever reach a point of 4x level or like low volatility. But, you know, essentially like I would see it as with growth you hit points where, you know, just the expectation of returns diminishes. You know, like what people are shooting for with a $10 million asset or $100 million asset is very different from a trillion dollar asset. I don't think anyone's looking for the next 100x on Bitcoin. And with that, like, you know, just as you scale, the expectations diminish and, you know, it becomes more palatable because you, you've introduced different people that are there for different reasons than, you know, they might be very early on.

You know, it's also at that point less of a speculative endeavor, you know, conceivably many of the issues and open questions and, you know, all of these risk surface items that, you know, know, create the asymmetric opportunities, you know, have been answered and have been satisfied already. So OMA is fractionally backed by a basket of assets. And this basket of assets, so basically as far as I could see, it's mostly USD stable coins and pretty volatile assets like ether, right? So basically, how does this compute with what you're saying about a stable asset that's not correlated to the dollar. That's not, that doesn't, that's not just peg to the dollar. Yes.

So I, you know, one, I would not consider there being a direct correlation between the value of Om and the value of the Treasury. You know, there's an indirect correlation between the two, but, you know, like, if ETH is 100% of the Treasury and ETH goes down 1%, that does not mean that OME is going to go down one percent. excluding the liquidity portion of it, which I'll touch on a sec. But, you know, essentially the goal there is that we are accumulating what is currently considered money or our currency. You know, like those are what is recognized today.

You know, there's no reason to fight that. You know, essentially the purpose of the Treasury is that the protocol has purchasing power, you know, to influence the market if it needs to. And to do that, you need to have a treasury that consists of assets that will continue to be recognized as valuable. You know, like today, I would consider those as, you know, primarily USD and then like ETH slash BTC, and it's a lot easier for us to have ETH than Bitcoin. You know, Bitcoin on Ethereum is trusted in any form to some degree. So, you know, it's primarily. There's also liquidity in there. So that liquidity is paired against also, you know, like die or eth.

But they are different assets in that, you know, the liquidity is paired against om. You know, it has very direct like utility for the market in that the protocol is facilitating trading at all times. And then, you know, one other piece that, you know, I think it's super interesting and I don't think gets recognized that often is that because the protocol is the one providing all the liquidity. You know, anytime that someone is making a trade, the protocol is a counterparty on that trade. So there's this question of like, you know, when is the treasury going to be deployed into the

market, you know, especially like lately because we've, you know, been down in the dumps a little bit. And it's like, okay, the treasury is actively buying back every time someone sells. You know, we keep, you know, generally more than half of the treasury in liquidity where, you know, it's actively deploying significant amounts of money to allow people to exit if they want to. You know, there's reserves, which is the money that is kept off to the side, you know, for the purpose of like, you know, you don't want to have everything exposed to the market at any given time. But, you know, that is actively a dynamic, you know, pretty much 24-7. Got it. So you have this protocol owned liquidity, which is the protocol basically buying and selling.

And it seems like that's related to bonding. There's like bonding and stake. right that are the two main things that one can do in the protocol can you talk us through how that creates this more stable currency that you aim from with with own so I'll first just kind of explain them so bonds are a automated and I see it as it removes more moral hazard from the equation of the protocol liquidating its own token in exchange for assets. So it's looking to accumulate assets. You know, there's a route that you could take of just mint a bunch of tokens into a multi-sig

and sell them into the market. That is wrought with moral hazard. You know, there are so many things that can, you know, either go wrong there or be, you know, used for malicious actions in, you know, either a direct way. you're just like stealing money or an indirect way of your front running trades and you know you're doing things like that. So the bonds, you know, have, it's essentially a mechanism where it spins up an isolated market for an asset. It prices that asset based on third party behavior. It doesn't use an Oracle.

And, you know, one thing that is unique to the way that we implement them is that they defer trades over a set amount of time. So you go and you bond and maybe your vesting term is a week. And you will not receive those tokens until a week from then. You know, the protocol pays a little discount or a little premium on the assets for that because you as the buyer are going to look for some level of discount to accept that illiquidity. You know, otherwise you can just go to the market and buy there. And, you know, you have the tokens right then. one of the things that the bonds accomplish is that they, you know, provide liquidity into the market,

where, you know, right now it's one-directional flows. So it's providing sell-side liquidity. That's kind of a meme when like VCs say it, but I do think that it's quite valuable in that, you know, one of the issues that you will run into, especially with early stage projects, is just that there's not enough liquidity for, you know, people to enter. And so they won't. You know, if it's not worth, you can only buy. 10k worth without moving the price by 10%. And so, you know, if that's not enough of a position for you to really care about it, then you're just going to go somewhere else. So I will add, you know, I think that especially probably in the near future that will move to a net system

where you're doing two-way flows protocol is actively buying and selling. And it just becomes what is the net of that. So has it sold more this day? Has it bought more this day? And that gets determined by how people are behaving in the market. So if the market moves down, it'll buy more. If the market moves up, it'll sell more. And then if the market goes flat, you know, you have some net that's kind of like tuned. The staking is this component where you have tokens and you can stake them with the protocol to earn more tokens. And, you know, especially historically, this has been had quite high rates. The reason for that is that the protocol was accumulating assets at quite high rates relative to to market cap and to, you know, the Treasury that already had.

The dynamic that this has, so when you offer bonds, they are inherently deplete or dilutionary onto the market, right? So you're creating new supply and you are adding it into the market. And, you know, everyone else's ownership of the network is going to decrease as a result of that. The analogy that I would use here with how staking plays into this, and I see this is one of the chief like benefits of it is you know imagine like a a bucket or a pool or something of water and you you drop some dye into it and if that water is still you're you're going to see the dye in the water um you know it depends of how much you put in there but if you imagine it's like a decent amount then the water is going to change color what the staking does is it makes that water moving so you know now imagine the same thing

but with a stream and you dump or, you know, die into the stream and you'll see it for a second, but then it dissipates and it moves because the water is constantly moving. And it's getting shifted around to everything and it gets swept down. Where, like, I think it's pretty crazy. So we have grown supplies since launched by 87% and the treasury is worth $600 million. You know, our market cap has been below that for, what, like 60%? percent of that time. So without even selling half of the supply, you know, it was able to accumulate a significant

amount where, you know, essentially that staking component protects everyone from that dilution. It spreads that impact of the bonds out. You know, it defers it over time so that it is not, you know, it would be economically unfeasible, I think, to do this if you did not have that staking component there. The good thing, though, is, you know, because we started with, you know, very, very high rates. And, you know, the result of that is one, you're going to have a lot more volatility because supply is growing really quickly. You know, two, the bond discounts get really deep because, you know, there's additional implied volatility. There's also, you have to kind of keep up with what staking is going to provide.

And so the protocol has to spend more for every, you know, asset that it takes in. But, you know, we started out very high because the Treasury started with like a quarter. million dollars. And, you know, the growth that you're targeting is incredibly high in a percentage basis from that. You know, at this point with a 600 million dollar treasury, you know, like, the growth that we target remains high, but it's not that high. You know, it's significantly lower than it once was. And so those staking rates can come down. And with those staking rates coming down, you know, you see decreased volatility as a result of supply expansion. You know, the rate at which everything is growing around, you know, the liquidity and around the treasury is diminishing.

And so the treasury doesn't even have to sell as much because, you know, essentially the goal with the treasury is that you want to keep up with the rate of inflation of the network. You know, you don't have to at every or at any single given time. So there are times when you're, you know, growing slower than the network, times when you're growing faster than the network. But, you know, on a net basis, you want to match it. If supply is growing slower, you don't need to do so as quickly. Yeah, it just makes everything a little easier.

You can start to smooth things out. You can start to like we're pushing out the bond terms now where, you know, we, we had five-day terms for pretty much the first nine months. And now there's like a, there's 14-day minimums. There's like a 30-day out there now. I think that we're going to start pushing for like a 60 and a 90-day, start doing quarterlies. A lot of cool stuff opens up when like you don't have 10,000% APYs. You know, it's actively like a negative. It served its purpose, but glad we're done with that.

Zeus, can you maybe talk about bonding and staking in terms of when they, under which conditions they make you money and under which conditions they lose you money? Yeah. So I'm going to talk in terms of how the bonds work now. They shifted a little bit. We have this V2 mechanism, but I don't think that it's that useful to let go into. So, I mean, it actually makes a lot easier with like this GOM token that we now have, which you can think of it like a bag of OM. You know, so it encapsulates all of the rebases that are experienced in the market. So, you know, it uses this index, which starts. at 1 when we started, and then every time there's rebase, the index increases by the rebase amount. So, you know, if you're a staker, the price of OM itself is not particularly important. If you look at the price of GM, that's essentially like the analog to like a normal token, which some people don't like this, and I understand why, but, you know, I do think that at this point, like, you know, having that direct relationship available to see easily is a problem.

positive. But, you know, essentially as a staker, what you're looking for is that, you know, your holdings increase at the same rate or, you know, probably ideally for you, a greater rate than the price of home depreciates. And, you know, there's this decorrelated dynamic between the staking growth and the price of own. So, you know, the staking index, is constantly increasing. Price to own kind of trades on its own. So, you know, over a long span of time, it's expected to depreciate. But, you know, it has periods where it appreciates.

It has periods where it depreciates. And, you know, like, you can expect in the long term that it will decrease in price. But, you know, the path that it gets to get there is anyone's question. For a bonder, I mean, essentially what you're looking for is a similar dynamic, but adding a time component to it. So the way that the bonds work now, which is a little different from how it used to, is that you are offered a discount.

That discount gives you an amount of geome, which is staked. And you now hold staked exposure, but you're a liquid until some amount of time into the future. So, you know, the dynamic here, and what we generally see is that you are a staker already. you see some discount that is appealing to you, which pretty much anytime it's above 0%, you're going to outperform if you just staked.

There's some amount of extra discount that you're going to want because now you have to be a liquid and you weren't before. But, you know, let's say it's 2% where you're like, yeah, that's it. You would, you know, unstake, go acquire, use your own to acquire whatever asset the Treasury wants. Give that to the Treasury. The Treasury will give you this note that says, hey, in two weeks, I'm going to give you this amount of genome that is 2% above what you had before,

and you've now increased your holdings by 2%. So the way that it primarily is utilized is essentially like a mechanism to increase your holdings in the network. So you are assisting the treasury in acquiring assets. You're doing the actual execution work for it, right? So this is this like removal of moral hazard is that you don't have anyone doing execution of trades. You know, it's decentralized and it's like carry out. But you're also taking on a liquidity for the network. And in exchange for that, you get to increase your holdings in it.

So, you know, it's this like accumulation mechanism or method. So in effect, you give the Dow alone, right? So under which circumstances would that be a loss making operation for you? Yeah, so I mean, I would say in OM terms, you're never going to take a loss. The loss scenario would be, let's say you hadn't gotten the bond, and it doesn't even need to be price goes down because you can think in opportunity cost terms. I think that's more fitting. But price goes to some level where if you were liquid, if you had those tokens in your wallet, you would have sold. but instead because you're illiquid, you cannot do that.

And you have an opportunity cost of not being able to do that. So that's your loss scenario there, is that you were not able to take that action until, you know, however many days or weeks in the future, that you can now receive your tokens back and do whatever you want with them. So if you say you can't take a loss in terms of OM, basically if the value of OM decreased, you would. take a hit, right? Well, you would in USD terms or or ETHs terms or whatever, but in terms of Oam, you know, you were staked with some amount, you bought a bond with a positive discount, you have more OME than you would have had otherwise, unless you were doing like a swing

trade where you sold and then bought back. But I mean, I don't know, I would consider that a little separate. It does prevent you from doing that because you're a liquid, but if the scenario is you're staked or you bonded at a positive discount, I can guarantee that you have more own at that point than you would have otherwise. Oh, yeah. So basically, you have more own, but that own might be worth less.

Yeah. Okay. Yeah. No, no, so totally. Like, you know, at the end of the day, it comes down to USD value, I guess. I mean, we want to displace this dynamic, right? But it generally does come down to what is the dollar price of my holdings. And yeah, if the price of home goes down greater than the staking rewards provide you more own and greater than the discount on your bond bumped up your staked holdings, then yeah, you would take a dollar loss.

One question around this. So it seems like the dynamic for stakers is that you, and just tell me if this is like along the right track, you lose money on depreciation of own. but since you're getting paid and rebasing every time O-M-is bought, you would expect to be net positive. Is that how it works in terms of like staking? Yeah. So, I mean, essentially your value equation is price-time supply. So, you know, for most assets, your value equation is just going to be price. You know, that's the only independent variable that influences anything.

and you know your holdings are going to be static maybe you're staking for you know five six percent yield or something but you know you can consider that somewhat negligible so you know really all you care about is the price of the asset whereas in this case it's a two variable equation right so it's the price of the asset times how much supply i have um and you know you combine that into what the actual value is what what uh leads you to believe that in the long run the money that stickers make from rebasing will be higher than the amount they lose on depreciation of home price. Yeah, so there's this argument that has been made, which is that Ome should trade for the value

of the treasury, which I think aligns pretty well there is, you know, this idea that, oh, you're like, you know, it's just going to depreciate back down to the treasury and, you know, whatever value you have is just going to be, whatever the, whatever you're like R of V or like, if you have one percent of the network, one percent of the treasury is going to be your value. I think that that take is very flawed. You know, the easiest way to debunk it is that it's like the equivalent of just saying that any asset should go to zero over time, you know, because that's essentially what it is.

Like I view the treasury as offsetting zero up, right? So you have, you know, in a normal network that has no assets behind it, zero is zero. In a market that has $100 million in assets behind it, $100 million is zero. You know, that's the point in which you can assess, like zero is your floor for the market. And if you have an entity or, you know, the protocol, which can set the floor at a higher price with infinite assets relative to supply to, you know, maintain that floor. Like, it literally cannot lose this game. You know, it has more money that it can buy back every single token in supply and have money left over. Then you just offset your zero up.

So, you know, is there a guarantee that staking rewards increase faster than the token depreciates? No. Same as, you know, is there a guarantee that Bitcoin will go up in price? No. Is there a, you know, is there a, you know, is there a, you know, is there a, you know, is there a, you know, is there any guarantee that, you know, USDA will depreciate slower than the federal funds rate? Like, probably not. Or even faster than your curve yield. No. You know, everything carries risk, you know, especially anything that has upside, right? So if there's upside, there's always going to be

downside. You know, I think that our success comes down to a lot of factors. And like, like, really, the Staking yield is a abstraction, right? So it's kind of irrelevant. You know, it serves a purpose, which is that we can have a relatively, or we can have consistent pricing on the asset while still having growth in, you know, that people as part of the network can take part in. But it's kind of irrelevant. Like, you know, this is why I kind of like GM, even though a lot of people don't, is that it does, like, shatter that illusion. And I think that that's why people don't like it. But like, you know, It's got to happen sometime. And, you know, like that's essentially what the staking abstracts away, you know, and it has purposes that are not really like make you think that, you know, I don't view the purpose of the staking rewards as make you think that, you know, the price will stay completely flat, guaranteed, and you will earn a thousand percent APY. So talking of yield, so Olympus Dow,

advertised for the longest time, I think still does. APY is of a thousand to 10,000 percent. Can you explain those? Yeah. So the equation to compute APY in any scenario is the amount of yield in some period times the number of periods in a year. So we do rebases every eight hours. in a year, there are 1,095, 8-hour epochs.

If the yield is like 0.16%, then you end up with 1,000% APY. You know, historically, it's been higher. I think early on it was like 0.6 or something. But, you know, like that is computed correctly. I also, you know, would pretty strongly argue that it was true. You know, so what we're looking at, we're still two months out, but the, you know, initial APY for staking was around 100,000 percent. And we will probably end the year at 130 index, which is actually 13,000. But I would consider that pretty damn close.

You know, and in the coming year, so we're lowering to a thousand percent roughly, which I think will be done in like a week or two. The expectation is that that is maintained for around a year. Essentially, we have this framework that every time supply has increased by a thousand percent, the rate is cut by, I think it's 25 or 30 percent per epoch. So essentially, like, you know, with a thousand percent APY, that will be a thousand percent APY for the entire year. And, you know, that framework is also like very public and widely known where, you know, you can forecast it pretty easily into the future, even if like, you know, like the rate is accurate, but whether that persists for one year from when you start is a question, but you can compute what it will actually be just based on that framework. Yeah. So, so, Zeus, if you zoom out of it, where does the value come from? So where is the value? So, where is the value?

you actually created? Yeah. So it is a mix of intrinsic value, which is the treasury, and extrinsic value, which is a monetary premium. So if you look at Bitcoin or ETH, you know, there is some level of value there. And like, you know, I think ETH is probably the stronger one that you can make this argument on. But, you know, that comes from fees that are generated. but, you know, a very large degree of it is just monetary premium. Same goes for gold, where there's industrial uses for gold.

You know, you can turn it into jewelry. That's not what makes gold a $5 or $10 trillion asset. What makes it a $5 or $10 trillion asset, I don't remember which one it is, but is monetary premium. It's that we as human beings figured out a long time ago that it's inefficient to use as money, something that is worth that actual amount. you know, because then you're just wasting a bunch of value in the economy. And so instead, we place monetary premium on things. We increase the value greater than what it actually is so that we can trade with something that, you know, it is really just based on social consensus and utilize value for

actually valuable activities rather than just to sit in a vault or your pocket or under your bed waiting for you to go spend it. And then someone else does the same thing with it. So what I take from this is that basically you can create arbitrary profits as long as people don't cash out, right? So basically those are book profits. So basically, if I wanted to, I could start a stable coin and say doubles its value every other day. And on paper, the holders of this stable coin would soon be very rich indeed. But if they end up looking to redeem, that's a totally. another story, right? So basically, can you walk us through how Olympus would deal with a significant

amount of stakers and bonders redeeming? Yeah. So I mean, like I'll first say that this is the case with any asset. So it doesn't even have to appreciate. If anyone holding, or if everyone holding some asset looks to cash that asset out, the value of it is going to go down. You know, unless you have some entity or group of buyers that are going to buy every single token off of them. You know, it's just how a market works, right? Supply and demand pushes the market to a price at a single point in time based on supply and demand at that time. And if supplier demand changes, then the price will change.

What the protocol does do is, you know, one, it facilitates trading and offers the market itself. So you have this guarantee that there will be liquidity in the market. And so, you know, on a normal day when you're not in, like, if you're not in a bank run situation, then the protocol is completely capable pretty much all the time of allowing you to get out if you want to get out. You know, which like bank run scenarios are really a loss of confidence. And so, you know, essentially like, I'll talk about that. But barring that loss of confidence, there's no issue there. You know, you can have the same dynamic with third party LPs.

you have a trust relationship that those LPs are going to continue to provide that liquidity. Otherwise, you can have that dynamic deteriorate. So, like, suddenly, there hasn't even been a loss or loss of confidence with holders, but no one can leave. You know, there's just no liquidity for you to sell and do. In the bank run scenario, so, you know, you still have the protocol providing liquidity. And so, you know, it's actually buying back throughout this process. But, you know, the price starts to tank because more and more people are selling. And, you know, that leads to more and more people selling.

And, you know, you can kind of spiral. Again, this is a dynamic that you can see in literally anything. But, you know, we're not immune to that. We have yet to do this, and I will kind of go into why. But, you know, the idea is that in these scenarios, the protocol taps into its reserves and says, okay, we're going to step in and provide that by-side liquidity so you can leave. and because this is a confidence crisis at the end of the day, it's just that people are scared that if they don't leave now, they're not going to be able to.

And so everyone wants to leave at the same time. The Treasury's stepping in quells that confidence issue, right? Suddenly everyone is satisfied because, oh, if I want to sell, Protocol has got my back, Treasury's got my back. It's going to let me do so at a reasonable price. And so I don't need to sell. And suddenly no one wants to sell. You know, like this is how current,

work. Like, you know, if everyone decides tomorrow that they need to get out of USD or euros or, you know, anything, those, you know, even the strongest currency in the world will collapse. You know, it is guaranteed. Like, you know, it's just a matter of like, generally, that's not an issue. I mean, when it is an issue, they can step in with their foreign reserves and, you know, satisfy the masses that are so scared. You know, this is what, like, FDIC insurance does as well for, you know, commercial banks, you know, instead of being worried about a bank run that everyone is going to pull money out of your specific bank and there's going to be no money left because, you know, the bank is doing factional reserve and it's lending out your money to someone else and it doesn't

have it on hand. FDIC insurance in the U.S. will print dollars and give it to the bank so that concern does not exist. There is never a scenario in which there's not enough dollars to pay you back. And so you never see a bank run because why would you have a bank run? Because why would you have a bank run. There's no concern to be had. In terms of why we haven't done this yet, I see it as just a matter of scale, right? So essentially, that bank run situation is a game of chicken. You have the market, which is looking to exit, and you have the treasury, which is looking to prevent them from being concerned. So I guess the market is concerned, and their action that they will take is that they're all going to dump.

And the Treasury wants to calm those concerns and you have a game of chicken, who's going to blink first? Is the market going to blink? Is the Treasury going to blink? The dynamic that you need to have there is, you know, who's going to win this game of chicken, right? So if the Treasury steps in and it starts buying, but, you know, it has to spend too much of its reserves to do so, and suddenly the Treasury is shrinking, too.

You know, that's going to compound the issue. It's going to make it worse. because suddenly whereas previously you had the treasury can step in and you know people are going to be calmed by that alone where you know the bank run won't be as bad because that still exists once you start tapping it in in size you are you are going to get a hit with a situation of like oh shit now the treasury is smaller too and so there's people that were fine before and no longer um so the the dynamic that you need is if you think of this game of chicken

as like two cars and they're driving at each other and it's a matter of who's going to turn first. You need the treasury to be in an 18 wheeler. You know, it's got to be a much larger car than the car driving at it so that that car driving at it knows that it has no chance of winning this fight. You know, it can overpower you with ease. It's not going to tap in even a significant portion of its treasury and it's going to calm everyone down. It's going to be just fine. And that removes the need for this scenario to ever even happen, you know, because you know that it's just going to win. Like, you know, there's this common saying, like, don't fight the Fed, you know, it's because if you fight the Fed, like, you know, maybe there's some tail risk scenario where the Fed actually

does lose. But, you know, one, you got bigger problems if that happens. And two, it's, you know, pretty unlikely. And that's like the last event that you're going to have is when that, when that occurs. So you just don't do it. You know, you don't. Like, it's going to win. Well, why fight a fight that you're going to lose? But Zeus, I mean, the reserves are way smaller than the outstanding loans, right? So basically, how do you create that confidence if it's not borne out by fact?

The treasury is smaller. Basically, if everyone who held Ome were to cash out, there's no way that this could be born out by the treasury, right? Yes. So it really just comes down. I mean, so I would ask the same with like literally any asset where that is the case. The difference is just that you have a guaranteed buyer in the market.

And, you know, it comes down to a nominal game where like, you know, historically we have been on a reserve basis backed five to 10 percent. and on a total treasury value back to like 20 to 40%. So, you know, in that scenario where it's like 40%, right now, you know, so it's a billion dollar, actually right now, damn, it's like 60%. You know, it's a billion dollar market and you have, you know, like 500 million in actual assets in the treasury. you know, there's a reasonable case that, like, you could deploy those assets and, you know, like, accomplish that goal. But the issue is still that that's not that much money in the grand scheme of things. You know, so there are plenty of just single whales in this industry that have multiples more money than that.

You know, like, so the nominal kind of hurts you in that, you know, the nominal needs to be to the degree that, like, there's just no point here. You know, so if you maintain that same level of backing and this grows into a trillion dollar asset, then suddenly you have a treasury with $400 billion in assets in there with the sole purpose of just cashing people out if they want to get out. Like, that's probably enough liquidity for everyone. You know, Bitcoin doesn't have $400 billion worth assets in there waiting to deploy in. And, you know, it's drawn down, but not like, you know, there's no bank run concern really

at this point in time, you know, in this point in its life. that everyone is going to dump. Like this is the Ponzi argument that people made at it for literally a decade is, you know, if everyone decides to sell, it's going to go to zero and they're right. But like, you know, monies and currencies are a consensus mechanism. You know, they come down to just social consensus that this thing has value, even though inherently it does not. Or in our case, it does not to that degree.

I think it just comes down to, you know, time where you need to go through a bunch of really tough scenarios. And you need to, you know, rise really quickly and drop really quickly and, you know, kind of lash people from side to side and really show them like, okay, here is every scenario that can happen. And it's still a lot. You know, that alone just has that dynamic of like, you know, mitigating that concern. I would like to add something here. So I think this is, I see where you're coming from, but for instance, die, I mean, this is over collateralized. So basically this does not hold, right? And basically also for the US dollar system, yeah, I mean, obviously, I mean, we've had fractional reserve banking for a long time and it's not covered in gold or anything.

But I mean, if you look at the assets that back the debt that is held in US dollars, you know, all the houses and. and businesses and so on, that is actually, I mean, the value of that is actually way in excess of the US dollar value as well, right? So it's, so in a way this is also over collateralized. So I would view them. Essentially, traditional currencies are debt-based currencies, right? So they're, you know, for the most part, produced by collateralized debt against something else. You know, there's plenty of under collateralized or uncollateralized debt out there. But, you know, like, what are you talking about with, you know, you draw out, you know, you take out a mortgage against a house or, you know, something like that.

You're right in that, I mean, there's an argument to be had like, you know, this debt is going to inflate the price of housing and, you know, like the actual value that house is not as great as the loan that you took out. But, you know, barring that, that's correct. Like, you know, Ome is essentially equity based currency. So, you know, and instead of a debt relationship. You have an equity relationship, you know, which is more akin to like how money works, which is pure equity in a sense. You know, I would also just argue in the case of like die. You know, there's a much tricky relationship.

Like this is something that I kind of learned with the whole Algo Stable wave, which is, you know, if this is a confidence thing, you know, and that's really what it comes down to is just like, you know, how people on a aggregate level are viewing this. a peg is a very dangerous thing because you're essentially telling the market to derive all of its confidence from being this one price. And if it is ever not that price, you risk eroding confidence on an aggregate level. And when that happens, you compound the issue because, you know, you depeg slightly and then people start to get out because you've depegged slightly. And suddenly you've depeg more and more people are going to leave. And, you know, you can spot, like, this is how all of the Algo Stables essentially failed, is that you have a very small depegging incident that turns into a full-on collapse. We don't have a peg, you know, so it removed, like, you know,

this is why you need to be over collateralized as a stable coin, you know. I have one more point there, but, like, you know, to a large degree is that you need to have absolute control over maintaining that peg at all times. Otherwise, you risk total collapse. And it can happen in an instant. But essentially what the debt does, right, in that collateralization, is that guarantees demand for the asset, right? So you don't need to have someone come in and buy dye for die to come back up to peg, you know, because you're just going to liquidate debt and that's going to serve as your demand. And you can guarantee that.

That's the same thing, essentially, that the Treasury does, which is that the Treasury guarantees that there will be demand in the future for the asset, you know. So it's a similar purpose, but, you know, like, I personally think that. like debt-based systems turn pretty insidious, you know, relatively quickly. And like, you know, I think equity-based currency is, you know, at a bare minimum, like, pretty unexplored in, you know, like modern, the modern currency landscape. I'm of the belief that it can work. But, you know, I guess that that's part of the grand experiment. One question I have around this is, um, empirically, you know, You talked about being down in the dumps a little bit.

How have like speakers and bonders done and what do you think is driving that market cycle? So, you know, I think that one of the main issues. So there's two components that I think really like, because, you know, you can look and like, it's drawn down a lot. But if you zoom out more than like three months, it's, you know, remains flat. up. You know, I think that there was two things. So one was the entrance of a new type of market participant in mass, which was a lot of people that were looking at the APY is guaranteed money and were aggressively deploying in and, you know, discovered that it can draw down and, you know,

suddenly like, you know, the time horizon was very short, you know, they're looking to come in, get rich quick, and then leave. And, you know, you can look at pretty much any, any market in the world, you know, if your market becomes dominated by those type of participants, you're just going to go up really high and then you're going to go down really far, just, you know, how it works because, you know, it's a reflexive relationship. I mean, I personally, like, essentially spent past August of last year, like disconnecting from social media and was not particularly active in the community, you know, I do regret that now because I spent, you know, the first six plus months of our existence, like really urging people against that, you know, trying to explain that the,

the yield is not free money. It serves a purpose and, you know, we're communicating like, you know, essentially what it is, but, you know, that's not how you should view it. It's not that you are guaranteed this amount of money. You know, I stopped doing that for, for a period of time, and I regret that. You know, I know that there are other people that did that, but the, the other voices on the other side of the aisle kind of won out, I think, for a period of time. The other issue that we ran into, and I think that this was the much more significant one, was debt, right? So, you know, kind of going along the lines of this is free money, people started to lever up aggressively. You know, they call it 9-9.

You know, so you take your own, you go to a lending market, you borrow against it, you use that to buy more home. You know, hopefully you don't do this again where you lever against it again, but I think that they were probably, probably people out there doing that, where the market built up like a quarter billion dollars worth of debt in the span of like two and a half months, you know, aggressive growth of debt. And, you know, compounded by the fact that because this is on a secondary market where you need real people lending money for people to borrow. So you can compare this to like die, which is a primary market where die is minted for you to borrow. And so you can control those interest rates and keep them low.

The interest rates on these debt was very high. You know, people are paying 22% 25% interest, which when you put that on a quarter billion dollars of debt, that's a lot of interest payments. And that's interest that has to be paid in die in USCC and, you know, external assets. And because people are levering up, you know, they're putting money into the market today. And there's not a whole lot of guarantee that that money is going to be there tomorrow. And so we've had this massive debt unwinding where like $200 million worth of debt has been repaid in the past two and a half months. Enormous sums of money. You know, I'm of the opinion that literally no other market probably like in the industry barring like maybe major caps would have been able to weather that kind of storm.

Like, you know, if you think about the amount of liquidity that is required to not only pay back $200 million in debt, but pay back everyone else. that's trying to leave as that debt gets unwound. Like, you know, it's insane. Um, you know, and it's really just facilitated by the fact that, you know, in any other situation like this, where you have third party LPs, they would have pulled their liquidity a long time ago. And suddenly you have a, uh, a market that has $250 million in debt and $2 million in liquidity. And, you know, you go to zero. All of the lenders are shit out of luck. Like, you know, and that's the end. Um, you know, I think that like this was a great demonstration of the fact that, Like, yes, you know, we've drawn down and it's been painful.

You know, we've essentially unwound all of that debt. We were able to do so while paying back every single lender. You know, so I think that proves that this is a great market to lend it. You know, like, you know, keep those interest rates low because, you know, it's a pretty safe place. Apparently, if, you know, not only can it grow very quickly and you're just going to have people that take profits based on that growth, but it can also pay back all of this debt. in a very short period of time. I mean, those are the two main pieces.

We also had this migration where we moved to a new contract set. And there's just a lot of communication, like challenges going along with that. There was the introduction of this GM token, which was like a whole other thing of people not understanding how that works. And it, you know, shattered the illusion a little bit, which, you know, I am of the belief that, like, really the people that draw the most, like, that dislike that the most are those that were kind of coming in with that short-term mentality because it shatters the illusion that this is guaranteed, you know, like 1,000% APY. You know, it says, look, like, this is the abstraction of what that actually means, which, you know, if you had an understanding of the system, you know, it's nothing new.

You're like, okay, this makes sense. Like, there we go. I was already computing this on paper anyways, so, like, now you've made it easier for me to learn or like, see it. But, you know, that was a whole other component where, you know, there's a lot of like social turmoil with that and communication issues and then like you know it's just a distraction that suddenly it's like what are we even doing because we've just spent so long like talking about the stupid migration that like you know we've kind of lost the the forest for the trees yeah i mean i think that like those are the the key things that kind of came together all at once

yeah so it sounds like the narrative kind of changed or got lost when you were not involved how do you fix that or how do you think about rectifying that? Because it seems like this free money narrative still is like pretty pervasive in some parts of the community. Yeah, I mean, so I'm of the belief and I'm like I was guilty of this myself, is that, you know, we had super strong consensus, you know, from like February or February when this was announced to probably August or September. of what this was and what we were trying to do. And I think that there was a level of complacency in that understanding that, you know, people would continue to understand that. You know, what that ignores is that, you know, the community grew very quickly

and you have a lot of people that are coming in and trying to learn about it. And unless you keep that, you know, messaging and understanding very clear and, you know, it gets passed down the chain, you know, it's like a game of telephone where, you know, you tell one person, they tell another person, you know, you need to make sure that the message stays the same every piece of the chain. You know, so this level of complacency that that would continue to occur. And, you know, with that, you make less effort to make sure that every piece of the chain, it goes, you know, like, you know, the message stays the same. And you end up in a scenario where the, like, you know, five people down the line, the line, it's a completely different

thing than the first guy said. You know, you've kind of failed the game of telephone. Yeah. I, you know, I think that that's been a wake-up call, at least to me personally. And I think to a lot of the other people that, like, you know, we have a lot of great, like, community leaders and, like, spokespeople or, you know, whatever that are constantly trying to educate on these things. You know, I think it's been a really good wake-up call of like, hey, you know, this is a consistent thing. This is not like a one and done. You do it and then you're finished. Like, you know, it's a war of attrition.

You know, you just got to keep at it every single day. You know, I think, like with that. too, you know, there's this, like now there's this narrative which, you know, like, that this is a hedge fund. And, you know, that has not been helped by like, you know, Wonderland, which has now come out and said, this is what we're trying to do. And so that confuses people too. And that, you know, prior, you know, they were pretty much just like following in our footsteps. And, you know, now they've, they've switched it and, you know, that confuses people is still the same thing. Um, so no. Like, but, yeah, I mean, I, I see right now, like, like,

actively, like, that level of consensus and cohesion is, like, very rapidly returning. Like, I'm quite happy about it. You know, I'm getting back out there personally, which I hope helps. But, you know, I don't think that, like, I'm the only person at this at all. You know, it's definitely a joint effort by a lot of different people that are, you know, they have the understanding. They know what, like, I'm of the belief that we are actively targeting what we always have been. You know, it's just a matter of communicating that again and, you know, doing so in a very clear and open manner because, you know, maybe we forgot that, you know, you got to be doing that day and day out. How do you do that? So imagine that I'm like new in

the community really excited, think that this could be, you know, something really big. And I think that it's just like free APY, risk free profit, short term, I can make a lot of money and get rich. What would you say to that? How do you fix the narrative? Okay, let's treat this as like someone's listening and they want to know because that's probably what this is. I try to never talk about the yield except for what it's for, right? So like I personally, and I've said this like many times like pretty much since we launched, like I think that it's the least exciting thing here. You know, I felt that way from the start, but you know, there is a level like, okay, you know,

this is going to catch eyes and that's a good thing because, you know, one of the hardest things to do in this industry is just capture attention. You know, there's so much going on every single day that, you know, you know, you need some way to draw eyes. But, you know, I have always tried to stress like, you know, it's for a purpose and the purpose is not to view it in that light. You know, so definitely when when talking to someone and, you know, going through or either explaining or just discussing, like, you know, don't talk about that in terms of. of like, oh, in one year, it's going to be worth this much. You know, it is obviously a much more complicated equation than that. And, you know, really, like, it just serves a purpose. Like, I view it personally as, like, the targeted rate of growth of the network, if anything.

So it's not how much it will grow. It's targeting. You know, how much it actually does is, you know, determined by many factors, probably chief among them being execution, which is, you know, always the risk. can pretty much everything is execution. Yeah, please, you know, when talking to people, don't fixate on that as the end-all be-all or purpose of this. You know, it's very much not the case.

You know, it is a means to an end and a tool and nothing more. So, so, there's a lot to unpack here. So maybe I kind of, I'll try to kind of break down what I'm taking from this in two parts. So the second part is that Olympus Dow has a treasury and it manages its own treasury, kind of a lot like other protocols like GERN. And then basically there's a yield on that treasury. And I mean, that's kind of the part that we've seen time and time again in this ecosystem. The first part is kind of how Olympus Tao actually comes to hold that money.

And I do view that in the very least, at least as unorthodox. And I mean, this is kind of where the Ponzi aspect of it comes in. And basically what people think is a Ponzi, basically the fact that, I mean, basically if you look up the definition of Ponzi, it's a form of fraud that pays profits to earlier investors or people who cash out earlier with funds from more recent investors. and I feel like there's there's not really

a way to deny that that is happening here, right? First off, just on a on a semantic level, I just like that term. You know, I think that most people in defy and in crypto understand what people are getting at when they use the term.

But in a more traditional sense, it is, you know, the importance of that is not so much early investors pay investors because you can you know that's where the everything is a Ponzi argument which you know I don't think is a great argument but you know that's where that comes from is that you can point to very very many things in the world and say look exact same dynamic um the what a what class of a Ponzi is generally that you are lying about what you're doing and you know like they connect

where they said that they had a proprietary algorithm to to minor trade bitcoin and where we're using that to generate the returns. You know, that's not the case at all. You know, that's active deceit. You know, we are very, very open about what we're doing. Like, I would very, very strongly argue that that is not the case. And so I don't like the term just because, you know, people that aren't in the industry will look at that term and think deceit. Whereas the reality is that you're pointing to a, like a mechanical thing.

And, you know, I'm happy to debate on that. But, yeah, I just wanted to throw that out. there. The second one. So I think a really good analog here is literally like Bitcoin mining or pretty much any proof of work network. Right. So to date, I actually posted like a satirical tweet yesterday about this and it went over a whole bunch of people's heads and they were firing back with like, oh, this is such a terrible take. And I was like, yeah, you're right. Like, that was the point. But, you know, Bitcoin emits every single day about $40 million worth of Bitcoin that is sold on the market to pay for mining operations. To date, it has sold over, you know, $25 billion worth of Bitcoin, like, you know, at the value when it was emitted.

That has been sold by miners to pay for electricity and equipment and all of these things that, you know, there's no persistent value, really, to the network of that. It is a expense that has to be paid just for operations. That is how I view mine or bonding. You know, the only difference in that relationship is that, you know, we have the luxury of being on Ethereum a layer one. So we don't have to pay for security. We don't have to, you know, treat that as a pure expense where that money is gone immediately and never coming back. Instead, we can store it. You know, that's the only difference is that we can tap into it later in the future instead of just, you know, burning it essentially.

But, you know, like, I don't like that argument just because, like, it, you know, it insinuates, like, I would just ask, like, how does Bitcoin work then? How did Ethereum spend the first seven years of its life in deeply net negative issue or positive issuance where, you know, it's constantly being sold on the market? You know, and, like, you're not seeing any, there's no treasury there for you. Like, you know, how does any defy token that has pool two emissions work where, you know, it's giving up. tokens for free and those get dumped on the market. Like, you know, this dynamic exists so pervasively everywhere. And I would argue that Olympus is probably one of the best cases of it. It's one of the cases where it makes the most sense, because you're actually storing that

for the future rather than just burning the money away and you see no benefit beyond that single point in time. You know, you spend like sushi spent $250 million last year on pool two incentives. And where is the benefit of that today? You know, you don't see any benefit. of it beyond the single point in time in which you gave the money out. Whereas in our case, we have $600 million in assets now. Like, you know, essentially very similar emissions where, you know, we grew our supply by 87%. They grew their supply by 37%. And we have 600 plus times more to show for

it today than, you know, I don't know. I think that it is honestly one of the least Ponzi dynamics when you really think about it in that light. Because, you know, every single, especially in like defy mechanism relies on, you know, constant inflow of new demand to satisfy these incentives that you're pushing out for whatever activity. The last one that I was going to touch on is just the early money pays or late money pays out new money dynamic in itself. You can argue that at a single point in time, right, of like, oh, like price or like value

appreciates and, you know, to realize that you need new buyers to come into the market, you know, or that is true for if price is not going to depreciate, you know, if you want price to be flat, then you need equal new demand for the supply that's coming onto the market. Again, the Treasury is facilitating all this liquidity where it will buy back if external parties do not. But then it has reserves as well. The dynamic that you actually see is, you know, early money pays new money, right? So if someone came in and they contributed, they bought bonds and they contributed money to the treasury months ago, and then they left.

And now the value of the network is greater. And the treasury has to be tapped in either with the liquidity or the reserves. You're having the early money pay the new money, you know? You flip the dynamic on a TED. It's actually the opposite. Where, like, I think that alone is like, okay, like, you know, I just see this argument so much. And I really don't think that it holds up. Yeah, I will totally give you that, I mean, what you're doing is transparent.

I mean, it's not a fraud. And basically, I think, I truly believe that, I mean, no one's forced to go into this, right? So, I mean, it's not, it's not like you're defrauding investors or anything, at least in my view. But, yeah, so basically, I think the term. I do get your point that, yeah, there is a different connotation to it in this ecosystem than in most other settings. People in Defi, I think use it endearingly, which is like, but, you know, it's a little dangerous. Yeah. We're kind of, we're running long.

So I would love to keep going, but we kind of, we need to run. wrap. So, Zeus, what are your goals for Olympus this year? A couple things. I'll throw out some more like intangibles and then some specifics. You know, so one of the things that we're targeting is greater and greater like liquidity influence within the defying crypto ecosystem. You know, so one of the most important components of a currency is that it is, you know, the most, if not one of the most liquid assets. that you can find. You know, so we're aggressively targeting building up our liquidity influence not only in our own, or in our own pools, but, you know, capturing new projects, having them

pair against us, you know, partnering with existing projects and having them move their liquidity with us. There's actually a new exchange that will, I don't have a date to give, but it's going to take like a pretty proactive stance on helping us facilitate that. because there's a lot of upside I would consider for an exchange in, you know, partnering us with us in that endeavor. You know, there's very few projects and entities that have any interest in, like, actively growing dex liquidity besides us. Another one is, you know, I think that we're probably going to start actively,

or actively, like, utilizing the treasury for, like, what I see the treasury as being able to provide. besides those like real like tail risk bank run scenarios is that we can use it to influence incentive structures in the market in artificial ways that might be beneficial to the market. So, you know, essentially you can have the protocol take positions that, you know, you don't want it to be this massive loss losing position, but it's something that a rational actor in the market probably wouldn't do. You know, the best case or the best like examples of this are just when you have operational opportunity cost. So, you know, some, some opportunity that, you know, still makes the treasury money,

but you could have taken that money, put it somewhere else, earned more. But, you know, in, in manners that, like, I'm working on this, like, call strategy kind of thing where, you know, the protocol can offer, offer options in a manner that would be very hard to incentivize third parties to do. But there are intangible benefits to the protocol and allowing it to, you know, provide additional liquidity with lower cost and, you know, provide new forms of exposure that, you know, are kind of unique to our market. Yeah, I think like another one is just, so we have this new bond infrastructure. And with it, we can do this like, you know, we're going to see if we do this. I haven't like proposed yet. But what I think I mentioned it before, like a net structure on bonds.

So rather than having it one way where you have, you know, only the protocol taking assets into the Treasury and not the other way around. You know, switching it to a net-based system where, you know, every single day, it is buying $10 million worth of OM and selling $11 million worth of home. Instead of just selling one or $11 million worth of a, or sorry, one. You know, with that, you are going to generate new activity and volume in the market. You're going to provide additional liquidity where, you know, let's say that that is a day where there's more supply in the market. You know, maybe it ends up actually, you know, buying back 13 million and selling eight. Essentially, like it creates a wider band, my expectation at least, of liquidity that allows

volatility to compress and, you know, single point in time, like supply and demand to, to sort itself out better. You know, it's, I view it in a very, in a very similar dynamic to what I was, like the, the water analogy with the staking rewards, where you're like diluting that dilution away. similar, but with, you know, supply and demand of the markets. There's this big focus, you know, that I've been trying to push on the economy of Olympus. I call it the economy with an H between the O and the M. But, you know, essentially like, you know, for a currency to be successful, it needs an economy around it, you know.

I would like, yeah, you know, you need to have decorrelated finance, or you need to have decorrelated activity happening on top of you that has nothing to do with the currency itself. You know, it's just people transacting or trading or, you know, whatever. Um, you know, so there, there's this massive push within the Dow that, you know, there's like an incubator program and grants and like really heavy outreach to, uh, you know, build up our, our economy around us. Um, I would say that that's probably the, the single biggest one. And that, that aligns with like the liquidity piece. Really, we're just trying to, we're trying to spread our wings within the industry. Cool. That's, uh, that's a lot of plans. So where can people go to find out more about you and Olympistow?

Yeah, so you can go online, Olympistow. Finance. The Twitter account is at Olympistow. Or there's a link on both to the Discord. That's like the main hub for community activity. And if you have questions, if you want to meet people that are in the community, I would advise that that's probably the place to go. I believe there's an unofficial telegram group, so I won't give any app for that, but it does exist. I kind of want to take that back now. Please make sure that you're on the right one.

I'm also on that note just going to throw out like please, please, please, never interact with people that DM you first on Discord or Twitter or Telegram or any of these things, especially if they're saying that they're a team member, that their support, any of these things. This is not Olympus specific. It's anything in Defi. They are trying to scam you. They will take your money. Do not click links. Do not download and open files. Please. Like the number of people that have reached out to me and said, like, I made one dumb mistake. I opened a link and my metamask got exploited and now I have no money.

Like it breaks my heart every single time. Like, please be careful. It's a dark forest out there. There's a lot of people looking to take advantage of you. And, you know, you got to, no one is going to look out for you except for yourself. But at Olympus doubt on pretty much everything. Thank you, Zeus. Those are good last words.

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