Disclaimer: This article is for knowledge-sharing and does not represent an endorsement or financial advice from ApolloX.
<ul>
 <li>Olympus DAO’s OHM aims to be a truly decentralized reserve currency, backed by decentralized assets instead of by fiat like common stablecoins.</li>
 <li>OHM holders can participate in staking, buy bonds or sell OHM.</li>
 <li>Olympus DAO references game theory in their (3,3) concept, where users are encouraged to only stake or buy bonds to generate the greatest gains for everyone.</li>
</ul>
From DEX to Yield Farming, it seems like we are trying to build up a DeFi (decentralized finance) system. However, when we talk about stable assets in crypto, stablecoins will always be the first asset in our minds. Why? Most stablecoins like USDT are pegged to USD at a 1:1 ratio. Unlike the high volatility we associate with crypto e.g. Bitcoin or Ether, the lack of volatility in stablecoins helps people retain the same purchasing power, whether today or tomorrow.
However, these same stablecoins are tied to fiat, which are highly centralized currencies and controlled by governments. This makes them subject to inflationary pressures. Can they truly contribute to a DeFi world then?
<h2 id="header-0">OlympusDAO</h2>
With the advent of DeFi 2.0, we are seeing a new wave of DeFi projects aiming to create a truly decentralized, stable crypto asset. One prominent example is decentralized reserve currency: OHM (Olympus DAO).
You may also have heard about (3,3) but do not understand it. Interestingly, (3,3) originated from OHM. To understand (3,3), we need to understand how OHM works.
<h2 id="header-1">OHM’s Value?</h2>
Let's make it simple. OHM has a treasury including different cryptocurrencies like DAI. The treasury expands by selling bonds, which I will talk about below. If the OHM value is higher than the treasury asset, the protocol will burn OHM. If the OHM value is lower than the treasury asset, the protocol will issue OHM. Therefore, we can say that OHM is backed by a basket of crypto assets. In fact, every OHM is backed by at least 1 DAI.
Unlike DAI, Olympus does not want to anchor OHM to a fixed value but aims for OHM to be dynamically stable based on its treasury asset value.
<h2 id="header-2">How Do You Get OHM?</h2>
The easiest way to get OHM is to buy it on exchanges. There are a few centralized exchanges you can choose from. To buy OHM on a DEX, you can check out Uniswap and Sushiswap.
<ul>
 <li>Staking</li>
</ul>
If you have OHM on hand, you can stake your OHM to receive rewards, which are generated from bond sales. Once you stake your OHM, you will receive sOHM (Staked OHM). Your sOHM balance increases automatically on every epoch (taking into consideration current APY), helping you to earn OHM passively via auto-compounding.
You can also use sOHM as collateral to borrow money or lend out your sOHM on the <a href="https://app.rari.capital/fuse/pool/18" rel="noopener noreferrer nofollow">Olympus Pool Party Fuse pool</a> (Olympus DAO partnered with Rari Capital to create this Fuse pool).
<img src="https://academy-public.coinmarketcap.com/optimized-uploads/e820877d9b51462a96dab1d0be134f3a.png">
Screenshot of OHM staking page on Olympus
<ul>
 <li>Bonding</li>
</ul>
You can purchase bonds on Olympus. To do so, use either single crypto assets or LP tokens to buy bonds. In return, you will earn OHM at a discounted price. For example, the OHM price is $389.91 in the demo picture below. If you buy a FRAX bond, you only need to spend $387.42 to get 1 OHM. Note that there is a 5 days vesting period which means you will only be able to get your OHM after 5 days.
Profit from bond sales is used by the treasury to mint more OHM for distribution to stakers. LP tokens also help to add liquidity to the protocol. These help to expand the treasury.
<img src="https://academy-public.coinmarketcap.com/optimized-uploads/1f0c0913f7074a5686aba3dca7eef779.png">
Screenshot of OHM bonding page on Olympus
<h2 id="header-3">So what is (3,3)?</h2>
Let's go back to (3,3). (3,3) is Olympus DAO’s interpretation of game theory. Game theory is essentially the science of strategy. In any given strategic situation, there can be multiple outcomes depending on how people choose to behave.
Similarly, there are three actions OHM holders can take: stake, bond or sell.
For two parties in the OHM system, the best situation with the greatest gains is when both parties stake OHM (3,3) because staking has a positive effect on OHM price. Bonding is a “neutral” behavior (1,1) and while it does help to add liquidity to the treasury, it will not cause a price change. If both parties sell (-3,-3), this is considered a situation with losses, because selling has a negative effect on OHM price.
Hence, (3,3) is essentially telling you that if everyone in Olympus cooperated (by only staking or bonding, not selling), they would be able to collectively generate the greatest gains.
<img src="https://academy-public.coinmarketcap.com/optimized-uploads/b5c2580d1c794940a45ede4cbf3256c9.png">
OlympusDAO - (3,3) Game Theory
<h2 id="header-4">What’s next in this sector?</h2>
Olympus Pro by OlympusDAO
Olympus Pro is like a bond marketplace where projects can issue their bonds through this protocol. It is Olympus’s attempt at a white label solution for bonds.
(4,4) Bonding
Many fork projects have appeared from OHM and some of them push for (4,4) Bonding. Take Hector DAO as an example. If you buy their (4,4) bonds, instead of receiving their native token HEC after the vesting period, you will receive sHEC (staked HEC). In this case, you do not need to manually claim the bond to receive the new HEC. (4,4) bonding skips the bond claiming action completely and automatically adds your new tokens into staking.&nbsp;
Further Reading: <a href="https://docs.olympusdao.finance/main/" rel="noopener noreferrer nofollow">OlympusDAO Gitbook</a> <a href="https://olympusdao.medium.com/introducing-olympus-pro-d8db3052fca5" rel="noopener noreferrer nofollow">Olympus Pro</a>
The views expressed in this article are the author's alone and do not necessarily represent the views of ApolloX.
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[ApolloX News Station] Olympus DAO: (3,3) Helps Everyone Win

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