- OlympusDAO is down 25% amid volatility in the market.
- Since launching, OlympusDAO has suffered during market crashes.
- The project has spawned many forks and attracted both fans and critics in recent months.
Share this article
OlympusDAO has been hit hard by the recent market selloff and is quickly approaching its all-time low of $163 set over the summer.
OlympusDAO Enters Freefall
Investors are fleeing OlympusDAO.
The decentralized reserve currency protocol is down over 87% from its all-time high achieved in April last year amid a selloff across the market. OlympusDAO’s downward trajectory has accelerated over the last week, shedding 43.5% of its value. The OHM token is down 24.9% in the last 24 hours, currently trading at $183. It’s about 12% away from its all-time low of $163 set during the May 2021 market crash.
OlympusDAO was the first crypto project to utilize a circular tokenomic structure to draw in liquidity. Thanks to OlympusDAO’s clever tokenomic mechanism, investors can earn outsized yields for bonding assets and staking the OHM token. This so-called liquidity “flywheel” has proven effective while the market impulse is bullish and has inspired many fork projects such as Wonderland Money. The OlympusDAO frenzy hit a peak in late 2021 as various digital assets soared to new highs, and by November it had hit a $4 billion market cap.
However, as the May crash and more recent price action have shown, OlympusDAO appears to suffer more than other projects when the market declines. OlympusDAO’s design has attracted criticism from many crypto enthusiasts who liken the project to a Ponzi scheme. This is because Olympus and other such projects need new money to enter the protocol to prop up the incentives for existing investors.
Other protocols that use a similar tokenomic structure to OlympusDAO have also been hit hard. Wonderland has also experienced similar losses, trading down 34.6% over the past week. On Ethereum, the OlympusDAO-backed fork Redacted Cartel is also bleeding despite almost tripling in value since its launch mid-December. The protocol’s BTRFLY token dropped approximately 34% during the recent dip, but has since partially recovered.
Since the start of the year, the crypto market has been hard hit after a weak end to 2021. Bitcoin briefly dipped below $40,000 Monday and is down 10% on the week but appears to have found support at current levels. Ethereum has fared worse, seeing a weekly decline of 17%. The second-biggest crypto asset also appears to have stabilized after testing support at $3,000. The latest dip follows the Federal Reserve’s Jan. 5 confirmation that it would hike interest rates, which also shook crypto and stocks.
However, while most crypto assets are following Bitcoin and Ethereum’s downward trajectory, there are some exceptions. NEAR Protocol, a sharded Layer 1 network, has bounced back from temporary weakness, gaining 17% in the past 24 hours. Elsewhere, the privacy-focused Oasis Protocol has also shown strength, rising 16.5% in the same period. Whether these assets will continue to decouple from the wider market remains to be seen.
Disclosure: At the time of writing this feature, the author owned ETH, NEAR, and several other cryptocurrencies.
Bitcoin, Ethereum Dip Below Key Psychological Footholds
The two most dominant crypto assets have been shedding points for weeks since reaching all-time highs in November. Today, however, they both dipped below key psychological levels. Psychological Resistance Almost…
A Guide to Yield Farming, Staking, and Liquidity Mining
Yield farming is arguably the most popular way to earn a return on crypto assets. Essentially, you can earn passive income by depositing crypto into a liquidity pool. You can think of these liquidity…
OlympusDAO Fork Snowdog Hit By 90% Crash
Snowdog, a self-styled decentralized reserve meme coin, has been accused of pulling the rug on its community after crashing over 90%. Snowdog Plummets 90% SnowdogDAO has sent investors reeling this…
OlympusDAO Posts Rally, Aiming for New All-Time Highs
OlympusDAO has bounced off its summer lows and is rapidly approaching a new all-time high. The project’s clever tokenomics, strong community, and meme culture are all driving adoption. OlympusDAO Climbs…