Fundamentals: Universal Acceptance Through The Liquidity Pillar
Welcome back to the Olympus Fundamental Series. If you’re new here, go back and check out the Olympus Foundations article, in which we presented an overview of OlympusDAO about who we are, what we’re building, and why we’re doing it. Next, how Olympus is being built can be broken down into three supporting structures:
- Reserve Pillar to establish Purchasing Power
- Liquidity Pillar to foster Universal Acceptance
- Utility Pillar to encourage High Usability
Last time, we reviewed the Reserve Pillar that’s responsible for #OHM’s growth, stability, and positioning as a decentralized digital asset. In this article, we’ll talk about Liquidity.
If you’ve spent time in decentralized finance or other markets, you’ll know that liquidity is an important factor in financial operations. Liquidity is the efficiency or ease in which an asset can be converted without a significant impact on the market or price. In OHM’s case, reserve currencies need to be highly liquid and easily exchanged for other assets, products, and services. In the simplest terms, you want to use a form of money that can be cashed in anywhere. Our solution to this task is the Liquidity Pillar.
The Liquidity Pillar
The Liquidity Pillar is responsible for OHM’s tradeability and universal acceptance as a deeply liquid asset. With the support of a solid Reserve Pillar, liquidity becomes Olympus’ second act in the DeFi ecosystem. There are three aspects that comprise the Liquidity Pillar in ensuring OHM’s tradeability.
Unit of Account is the first layer of the Liquidity Pillar. As DeFi’s reserve asset, we aim to have other protocols using OHM in liquidity pairs. To make another comparison to the traditional financial markets, take for example the US Dollar. USD is commonly used as a unit of account against other traded assets. Therefore, OlympusDAO will incentivize protocols to adopt and grow OHM in OHM-XYZ liquidity pairs (LPs). For example, Olympus will offer Liquidity-as-a-Service (LaaS) to enable borrowing OHM and bootstrap OHM-XYZ LP. We have already come up with a way to help bootstrap protocols on day one.
Olympus Incubator is a program with the mission of accelerating the econOHMy through the funding of new protocols that utilize or build on OHM or other Olympus products. This is not like other “launchpads” or traditional VC whales. Instead, Olympus will help foster community, provide mentorship, and create effective strategies. In addition to funding, Incubator provides:
- Community bootstrapping
- Advice, assistance, and testing
- Access to our launch and liquidity products
- Exposure and promotion to high-quality stakers
- The support of the greatest community the industry has ever seen: the Ohmies
Within Olympus Incubator there are also several distinct products:
- Olympus Sporos
- Olympus Grants
- Olympus Launch Partners
Each with its own distinct mission, the purpose of Incubator is to partner with and promote some of the brightest new products in DeFI that will help shape the econOHMy for years to come, no matter what stage in creation they are in.
Sporos aims to take on high conviction early startups (pre-seed) through a curriculum and provide resources and guidance all the way through launch. Mentored by some of the brightest minds in Olympus, we bring expertise and guidance for our Sporos partners.
Olympus Grants has a unique mission: to help projects that support circular economies and financial inclusion. The projects Grants identifies and funds assists OlympusDAO and current and future OHMies through education, infrastructure, and utility.
Cross-Chain Liquidity forms the second layer. In an increasingly multichain world, OlympusDAO will incentivize OHM-XYZ liquidity on all popular chains to achieve a truly ubiquitous liquidity layer. This itself can be broken down to two parts, Proteus and general cross-chain initiatives.
Proteus is our endeavor to populate various blockchains with liquidity of our governance token gOHM. It has so far been deployed on: Ethereum, Arbitrum, Optimism, Avalanche, Polygon, Fantom, and Moonriver. On the horizon are deployments in the Solana and Terra ecosystems.
We have worked with many Decentralized Exchanges (DEXes) and protocols on these chains to better incentivize pools and farming opportunities for gOHM. There is still more work to be done, but 2022 will hold a greater expansion of blockchains as well as deeper liquidity.
Cross-Chain is in reference to Olympus having full implementations with native tokens on all chains in demand. This would include our other tokens such as OHM and sOHM. It would also outline our plans to bring Olympus Give, Olympus Pro, and all new projects on the horizon completely cross-chain.
Liquidity Optimization forms the final layer. OlympusDAO has already formed strong partnerships with dozens of top-tier protocols. We’ll seek to further build or form partnerships that deepen liquidity and increase LP fees for our treasury. This means things like:
- V3 strategies — concentrate liquidity using various Uniswap V3 strategies through in-house or third-party integrations.
- Liquidity Accumulation — influenced by the Curve Wars, in which protocols seek to accumulate the most CRV to direct protocol rewards, Olympus will accumulate governance in protocols that control liquidity such as Tokemak, FXS, CVX, Tribe, etc.
Welcome to Olympus
All these efforts create a deeply-liquid and highly tradable reserve asset. As Olympus works to position OHM as a reserve currency, it takes the collective effort of our community to achieve this ambitious goal.
If you’re enjoying the fundamental series and align with our mission, we invite you to Join our Discord and get started in the community.
Onward & upwards!
Olympus is a decentralized financial reserve protocol that provides sustainable compounding interest through its community-owned and protected treasury.