With the arrival of Blockchain and the appearance of new 2.0 protocols such as OlympusDAO and its various forks, the current new DeFi 2.0 protocols have encountered a number of problems regarding their valuation.
What’s happening with Olympus DAO and its token $OHM?
The main problem with the new DeFi 2.0 protocols is that the tokens cannot hold their value at the moment. Users do not know if it is a token that is safe to hold or to stop buying.
This has caused that many tokens in the 2.0 protocols do not reach or take a long time to reach the desirable critical mass so that the different DeFi services can be developed, according to the expectations of users and investors.
In the last week, the DeFi markets have been very volatile. Despite this, projects such as OlympusDAO (OHM) and many of the forked rebase projects from it have been hit hard by these changes.
OlympusDAO (OHM) and many of the forked rebase projects it inspired have suffered brutal losses this past week despite the broader DeFi markets rebounding from last week’s lows.
The tumultuous markets have also pushed Ethereum’s seven-day burn rate up to 11 ETH per minute, while the Fantom, Arbitrum, and Terra networks each posted significant TVL growth for the week.
OHM is down roughly 53% since January and ranked as the weakest performing top 100 DeFi milestone on CoinGecko for the week. This has resulted in $OHM falling out of the top 100 cryptocoins by market capitalization, currently ranking 106th with a $1.06B market cap.
Wonderland
Wonderland ($TIME), another recently soaring OlympusDAO split, completes Coingecko’s top three DeFi drawdowns for the week with a downturn of 8%. This last week, the stock of Time Inc. has lost one-third of its value, with a drop of 28 percent in only the last 24 hours.
TIME is now trading at $1,161, representing an 88 percent decline from its all-time high of $9,700 reached in early November. Despite the decline, Wonderland currently has a greater market capitalization than OlympusDAO, and is ranked 91st in terms of total market capitalization.
Smaller rebase* initiatives are also suffering considerable losses, with the majority of rebasing protocols seeing long-term losses despite the fact that other DeFi assets have begun to recover this week.
A rebase or price-elastic token is one that is constructed in such a manner that the circulating token supply automatically adjusts (increases or lowers) in response to changes in the value of the token.
Staking is the most important technique for Olympus in terms of value accumulation.
Stakers place their $OHM tokens on the Olympus website in exchange for rebase payments. The proceeds from bond sales are used to fund the rebase incentives, which might vary depending on the quantity of OHM staked in the protocol and the reward rate established by monetary policy, among other factors.
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