Wednesday, September 27, 2023

Olympus DAO Votes to Purchase Extra ETH for Treasury Backing OHM Token

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Decentralized reserve crypto mission Olympus will enhance holdings of “unstable property” corresponding to ether (ETH) within the treasury backing its OHM token after member approval Friday of a brand new Treasury Framework.

“We’re concentrating on 75% stablecoins and 25% directional publicity,” stated an analyst on the Olympus treasury group who goes by the display screen identify Relwyn. That’s a change from the 79%-21% breakdown comprising Olympus’ $200 million treasury of stablecoins, unstable property and protocol-owned liquidity.

The tweaking will give Olympus extra publicity to ether, which at $8.4 million Friday was already the most important “unstable asset” within the reserve treasury backing OHM. Ether rallied arduous this week after the much-anticipated Shapella improve didn’t set off the mass sell-off many merchants had feared would come from a flood of newly unlocked ETH.

This shift is unlikely to be as “aggressive” on ETH that the framework’s authors stated many group members referred to as for. It is going to, nevertheless, lead to a lower in Olympus’ publicity to so-called stablecoins corresponding to DAI that faltered through the March banking disaster.

“Treasury group acknowledges the necessity for Olympus to lower reliance on stablecoins with centralized backing,” the proposal learn. “Rising ETH publicity marginally is one step in that course whereas not undermining the relative stability of OHM’s backing within the close to time period.”

Relwyn stated the treasury operations group “agrees” with group members’ bullishness, however cautioned the protocol can’t simply YOLO the whole lot into ETH with out incurring a hearty dose of threat. Quantity could go up proper now, however “quantity can go down, too,” stated Relwyn,

One more reason for the measured method is operational, Relwyn stated, noting Olympus’ mechanisms for rebalancing OHM’s backing might get wonky if the treasury’s ether holdings develop too giant. These mechanics presently value OHM in DAI, by far the treasury’s largest crypto holding at almost $80 million.

“If it priced itself in ETH, it might have extra heavy ETH backing,” Relwyn stated. “Mixing the 2 may be harmful” for a way Olympus manages its so-called range-bound stability.

The vote handed with almost unanimous approval noon Friday. Seventy-six wallets that collectively held 23,000 OHM tokens participated within the vote.

Edited by Stephen Alpher.

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