How to Stake Olympus DAO (OHM)

Olympus DAO is a decentralized structure that encourages the staking of its native token known as OHM in exchange for rewards. The idea behind the project is to serve as a transparent decentralized financial infrastructure that is completely controlled by its community members, that is those who own and stake the OHM token. The OHM token was also created to mimic the functions of stablecoins without being pegged to any asset.

Launched in 2021, Olympus DAO has grown to be one of the most controversial DeFi projects. 

Want to know more?

Well, read on as this article explains in simple terms all there is to know about Olympus DAO. You will also learn where and how to buy OHM, the processes involved in staking the token as well as whether OHM is really worth investing in.

The following topics will be discussed:

Let’s get started.

What Is Olympus DAO?

Olympus DAO or Olympus Decentralized Autonomous Organization was launched in March 2021. Upon its creation, the project introduced its native ERC-20 token (a token originally issued on the Ethereum blockchain) known as OHM.

Launched through a Discord offering and an initial decentralized exchange (DEX) offering (IDO), OHM is designed to act like a stablecoin without being pegged to any fiat currency.

For you to understand what we mean better, let’s put it this way: A large part of DeFi is currently controlled by stablecoins such as those pegged to the United States dollar like the USDT and others. 

Although stablecoins do confer a significant volume of stability compared to some crypto assets, their large-scale presence in the DeFi world presents some of the dependence and control associated with Centralized Finance (CeFi.)

This is what Olympus DAO aims to address. The OHM token is designed to behave like a stablecoin by maintaining its value not through a peg to a fiat currency but in another way.

To maintain the price stability of OHM, it is either burned or minted according to the token’s current market demands. In simple terms, this is how it works: when the OHM token seems to be undervalued, a significant amount of the asset is burnt to increase its value. When the token appears to be overvalued, a significant amount of it is minted to decrease the value to a reasonable degree.

Olympus DAO also holds some assets in its treasury. Although OHM is not pegged to any asset, its value is partially backed by some decentralized stablecoins such as FRAX and DAI. For instance, the DAI token is the price floor of OHM, but OHM trades higher in practice. The value can rise above the price of DAI, but cannot fall below. If that happens,  some of the treasury is spent to protect OHM’s value. This backing system allows the value of OHM to be driven by the market and at the same time be partly controlled by the DAI token. 

OHM serves as a governance token as its holders can vote on proposals for its protocol, hence having a say in the development of the project.

Olympus DAO also introduced to its token’s users two major economic and game-theoretic dynamics to earn profits namely: Bonding and Staking.

Olympus Dao’s bonding allows you to trade various tokens for OHM at a discounted price. Staking, on the other hand, contributes to OHM’s long-term price stability. In exchange for locking their OHM tokens in the protocol, Olympus DAO offers stakers extremely high returns.

Who Created Olympus DAO?

Olympus DAO was created by a pseudonymous developer known only as “Zeus.” The true identity of the rest of the team behind Olympus DAO remains unknown as well.

As such, there are no employees, CEO(s), or any other authorities connected to the crypto project.

What Is Staking in Olympus DAO?

Staking in Olympus DAO simply involves locking up your OHM tokens for a set period of time and receiving more tokens in return.

OHM staking is a two-way thing in terms of benefits. The process requires that OHM tokens be locked up for some time. The Olympus system benefits from this as it helps prevent sell-offs and stabilize the discounted price of OHM. In exchange for locking up their tokens, stakers are rewarded with more tokens.

The more OHM tokens you stake, the greater your reward and the higher your chances of being chosen to validate a block and earn a reward.

Learn more on Staking here: Cryptocurrency Staking: Definition, Types, Staking Vs Mining

What Is a Wrapped Staked OHM (WSOHM)?

Let’s start with understanding what wrapped crypto tokens are in general.

A wrapped token is an exact form of a particular crypto asset designed in such a way that it can be used on blockchains aside from the one it was originally built on.

With this in mind, we can say that a wrapped staked OHM (WSOHM) is a staked OHM that can be used on other blockchains such as Arbitrum and Avalanche. Simply put, staked OHMs can only be deployed on the Ethereum blockchain. Wrapped Staked OHM on the other hand can be used on other protocols aside from Ethereum.

Where to Buy Olympus DAO (OHM)

You can buy the OHM token through decentralized exchanges such as Sushiswap. Note that to successfully complete your purchase through this medium, you’ll need an Ethereum wallet address.

Here is how to buy Olympus DAO (OHM):

Step one: Create an account with any trusted centralized trading platform. You’ll be asked to create a password and provide basic personal information such as your email address amongst other requirements.

Step two: Once you’ve successfully opened the account, buy ether (ETH.) You can make this purchase by navigating to ETH’s page on the platform and then inputting the needed amount of ETH you want to buy. Complete your trade by following the provided instructions and you’ll receive the purchased ETH on your account.

Step three: Now send your ETH coins to your personal Ethereum wallet address. If you do not have an Ethereum address, create one by downloading a crypto wallet that supports Ethereum. Once you follow the needed steps and successfully open the wallet, you’d automatically have your own Ethereum address.

Step four: Transfer your ETH from your account on the centralized platform to your Ethereum wallet address. Then connect your wallet to any decentralized exchange offering OHM such as Uniswap, Sushiswap, or Ok.com.

Step five: Next, select the pair of ETH/OHM and input the amount of ETH you’d like to swap for OHM. Execute the trade and you’ve successfully purchased OHM token(s). You can confirm by checking your balance in your wallet.

How to Stake Olympus DAO

Stake your OHM tokens by following the steps below: 

Step one: Once your OHM tokens reserve currency has been successfully bought and stored in your personal wallet, go to Olympus DAO’s official website and click on “Connect Wallet.”

Step two: You’d now be asked to choose a crypto wallet. Choose the appropriate option and provide the password details to link your wallet to the website.

Step three: Then, enter the amount of OHM that you want to stake and send them to the OHM-staked smart contracts address provided on the OHM website. If you would like to stake all your OHM, press the “Max” button and the input field will automatically be filled with all your available OHM balance.

Step four: Now that you’ve decided how much to stake, you’ll need to carefully choose a trusted validator among the ones provided.

Step Five: Make your choice, click “Approve” and sign the transaction. Select “Stake now” and sign the transaction. You’ve now successfully staked your OHM tokens.

Once your Olympus tokens are in the staking contract, you will begin earning rewards immediately. You can check your current staking balance and rewards by visiting the OHM staking dashboard.

Note that in order to claim your rewards, you need to unstake your tokens from the contract. Although unstaking can be done at any time, doing so before the end of the reward period means that you will automatically lose any rewards that have not yet been paid out.

To unstake your OHM tokens and claim your rewards, go to the Stake page of the OlympusDAO website. Select “Unstake.” Next, input the amount of staked OHMs that you would like to unstake in the required field. If you would like to unstake all your staked OHMs, click the “Max” icon and the input field will automatically enter all your available balances. Select “Approve” and sign the transaction. Once it’s been successfully approved, click “Unstake” and sign the transaction.

How Do You Calculate OHM Staking Rewards?

When you stake, you lock OHM and earn tokens. What you earn is known as rebase rewards and they are calculated using Rebase Rates. The rewards from your staked OHM balance automatically rebase three times a day. This means that they automatically adjust (increase or decrease) based on OHM’s price at the time.

The rebase rate is obtained by dividing the total number of distributed OHM tokens by the total number of tokens staked. 

The Annual Percentage Yield (APY) for rewards, that is, the rate of returns you’d get from your staked OHMs in a year is calculated by adding one to the rebase rate. The result is then raised to the power of 1095 and then one is subtracted.

It raises to the power of 1095 because a rebase happens 3 times a day. Since there are 365 days in a year, this would give a rebase frequency of the product of 365 and 3 which equals 1095.

Is Olympus DAO a Good Investment?

Shortly after its launch, Olympus DAO seemed to present so much potential. Off to a strong start, the OHM token reached an all-time high of close to $1,500, less than a month after it was launched, with several users making and cashing out significant gains during that period. 

However, OHM’s price has since dropped. As of press time, the token was trading at approximately $11, representing a 99.2% loss in value from its ATH price.

Notably, OHM’s current condition in terms of worth is in solid contrast to the stability that the project hoped to achieve. However, if the token can rise up again and prove that it can be stable, it may be a solid investment. Only time though will tell.

Conclusion

In this article, we’ve discussed major details about Olympus DAO and its native token OHM. Amongst other things, we’ve considered what staking OHM is as well as the processes involved in it.

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