OlympusDAO’s slide continues: OHM's market cap is down nearly 80% from all-time high

Quick Take

  • The market capitalization of OlympusDAO’s native token OHM has fallen to lows last seen in May 2021.
  • The token is down nearly 80% from its all-time high.

The market capitalization of OHM, the native token of the decentralized finance (DeFi) project OlympusDAO, is down nearly 80 percent from its April 2021 all-time high of $4.35 billion, according to Coingecko.

OlympusDAO is a DeFi protocol with a treasury that backs the OHM currency with the aim of maintaining a certain price floor. The DAO issues OHM tokens at a discount to investors in exchange for their cryptocurrencies, a process designed to grow its treasury over time.

These discounted OHM tokens are called bonds and users often stake the OHM they received from bonds on the DAO itself or use them as collateral on Fuse, an interest rate market powered by yield-generating protocol Rari Capital. 

Judging by its performance chart, the OHM action has been in keeping with that of the broader crypto market with a significant rise in April and October 2021 before recent declines. 

In assessing performance, the focus on market capitalization for OHM matters because of the project's rebasing function. Essentially, with rebasing, one's share of the supply will always stay consistent.

OHM market capitalization chart: CoinGecko

Key to the project was an emphasis on staking. The project encouraged users to stake their tokens, locking up more of the supply and reducing selling pressure. Toward the end of last year, 91.5% of the supply was being staked. It's currently around 85%. But clearly, this was not enough to prevent holders from selling eventually.

This 2022 slump, while in keeping with the losses in the broader crypto market, has also been attributed to massive profit-taking from major OHM holders. According to data from Etherscan, one OHM holder swapped over 82,500 OHM tokens worth more than $11 million at the time. The trade happened on SushiSwap with the OHM tokens traded for the stablecoin DAI.

OHM has been on a downtrend since November 2021 and is down more than 60% year-to-date.  This price drop also meant that overleveraged OHM long positions went underwater causing a cascade of liquidations that ultimately led to further downward pressure on the token price.

Editor's Note: This report and its headline have been edited and corrected to reflect a focus on OHM's market capitalization, rather than its price. 

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