Olympus DAO has reduced the yearly percentage staking reward of the OHM token to 7.35 percent in an effort to make the system viable. The benefits were lowered once the DAO adopted the OIP-119 governance proposal.
In a Thursday Twitter thread headlined “Goodbye to high APY,” the project highlighted that although the DAO’s initial goal was to bootstrap adoption by delivering extremely high yield, the organization is migrating to a new tokenomics structure.
Olympus DAO is a DeFi system with an OHM token-backed treasury. According to its website, it has a two-pronged strategy for its activities. The first is via cryptocurrency bonds denominated in OHM tokens that have matured. In this instance, the DAO releases OHM tokens to investors at a discount in return for their cryptocurrencies, a procedure aimed to increase its treasury over time.
The second is single-sided OHM token staking. This yield is now shown on the official website as 267% APY, provided to individuals that deposit OHM into its single-sided token staking pool.
According to the DAO, this precise staking yield (also known as the “base rate”) would be reduced to 7.35 percent after the newest governance proposal. The DAO noted that this modification would help the project achieve more sustainable development.
In November 2021, six months after its introduction, the market valuation of OlympusDAO’s OHM token soared to more than $4.3 billion. According to CoinGecko, the market capitalization of the cryptocurrency has fallen 93% to $293 million.
Olympus has accumulated more than $266 million in crypto assets from consumer deposits. The DAO administers this money as a protocol-controlled treasury to support OHM tokens and finance its activities.
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