Reviewing the experiment of Olympus DAO

The idea of a decentralized reserve currency was introduced by Olympus DAO, which uses a bonding mechanism to issue its native governance token, OHM, to bonders. The funds raised from issuing these bonds are kept in Olympus’ treasury, which serves as a backing for the OHM token, giving OHM a theoretical price floor. A deeper analysis of Olympus’ working mechanics was covered in a prior research piece.

The purpose of a decentralized reserve currency is to serve as a stable unit of account that is resistant to the control of a single centralized entity, such as the US Federal Reserve. However, the price history of OHM and other notable OHM forks indicates that these tokens’ prices are highly volatile.