Crypto startups started like any other business. They had private equities or venture capitalists give them seed funding to set up their projects. And then from 2017 to 2019 ICOs that is initial coin offering switch is like IPO for Crypto began.

Then there were platform launches like binance where new Crypto projects would give half of their project to binance and then binance would shill it for them. These days we have these IDOs that is initial dex offerings where projects will create hype and then the large chunks of people would join their discord and then they launch the Crypto projects on discord.

DAO stands for decentralized autonomous organization, sometimes called a decentralized autonomous corporation, is an organization represented by rules encoded as a computer program that is transparent, controlled by the organization members and not influenced by any central governing authority.

Before moving further we need to first understand difference between backed and pegged.

Pegged to a dollar: If you buy a stable coin like USDT, that coin is pegged to the US dollar. How? If you guve Tether $1 they will give you one USDT and if you give them a USDT, you will get a dollar in return. So, it's like an open exchange that allows trading US dollars to and from the blockchain. This is what is called pegged to dollar.

Backed Currency:

Whereas a backed currency is a form of currency that comes with a guarantee that it can always be exchanged for a pre-determined amount of the asset that's backing it.

In this and upcoming posts I'm going to tell you everything you need to know about OLYMPUS DAO in most simple terms. So, let's start!

Here's a problem for setting up new crypto that olympus has essentially solved. For a new project to sell their coin they would have to do heavy promotions and then go to a DEX platform for launching,where they have to rent their liquidity.

This is why whenever you see a launch on platforms like Binance, there are huge discounts and freebies. This attracts nomadic traders that'll get all the freebies, get out with their profits to another project. This is why in most cryptos we see a big pump after the launch and then a big dump!

Now you know why renting liquidity isn't good. Hence, Olympus owns almost all of their liquidity. That way the whales or nomadic traders can't ravage their project. Which means anyone can buy and sell huge amounts of their coins and it wouldn't crash their system. You can see the market appreciation of olympus below.

So, if you have $10M worth of ohm, you can sell it as they own most of their liquidity unlike the problem with most shitcoins. You can earn huge profits buy can't sell because there is no liquidity.

Since, the currency supply of ohm is always increasing, olympus doesn't want its shareholders or stakers to be left out just like when you hold dollar or any other fiat currency. Because the FED and banks are constantly printing,the value of fiat money in your pocket is constantly depreciating(in a way).

Olympus doesn't want deflation in terms of purchasing power. So, it does rebasing where in every 8 hours you'll get more ohm, as long as you stake it. In this way your percentage of market cap of ohm that you own will remain same(as long as you keep it staked).

Eg: If you own 2% worth of market cap of ohm as long as you keep it staked, you'll continue to own that 2% because of rebasing.

You don't get rebasing with the dollar.

Now because all the money is going into the treasury, olympus has something that can back up the system. If you take ethereum, it isn't backed up by anything. In fact most cryptos aren't backed by anything.

Whereas olympus is backing the entire currency by their treasury and not by their market cap. The market value of the treasury is currently around $711M which means each ohm is backed by around 160 dollars.(treasury-market cap)

RUNAWAY:

Since, olympus has the treasury, it also has a runaway. Because of the high yield people think that it won't last long actually. Olympus actually can.

A 500% APY

As of the latest chart, the treasury can last for 832 days this means if the project is stopped right now there is enough money in the treasury to pay off five hundred percent yield for 832 days.

Or a 20000% person APY can last for 253 days.

The current APY is around 5300%. So, if the project stops right now the treasury willl still have around 400 days, more than 13 months, to continue paying out a 5000% yield.

So, you can see the treasury is backing the currency.

The ohm stakers are incentivized to stay staked with a really high yielding rebase. It's actually pretty much similar like the prisoners dilemma where 2 people may or may not have committed a crime. Because of insufficient evidence the prosecutors can't convict both prisoners on a bigger charge but enough on a lesser charge.

The prosecutors offer each prisoner a bargain and if someone gives up the other, that person gets a lighter sentence. But if both stay quiet, they get equal sentence.

What I mean to infer here is when you look at the group game theory/prisoners dilemma, if you and I both stay staked, we both win and the project wins. This is why ,you can see over 90% of the owners stay staked.

Or you can do bonding. You basically give loan to the protocol and then you get a discount on buying ohm.

And the worst thing you can do is unstake and sell.

Will be continuing in the next post.