The research of the OlympusDAO and OHM forks’ investing strategies
In order to carry out the most suitable investing scheme for the TRADAO Protocols, three of the most popular OHM forks are being studied.
Olympus DAO
The first one that I have to mention is the original, the pioneer of the mechanism, OlympusDAO. Olympus DAO has joined in the DeFi 2.0 space with a mechanism of requiring a protocol’s own liquidity instead of renting it through yield farming.
OHM has grown to a market capitalization of over $3.5 billion in just over half a year. The overall investing strategies of OlympusDAO:
- Investing in small projects from Olympus Grants programs like MetaMars, MoverDAO, etc. Olympus Grants is established to fill various gaps in the Olympus ecosystem by funding projects which help the DAO’s initiatives.
- Providing liquidity such as the FRAX3CRV pool, Balancer V2, Sushiwap, etc.
For example, the funding project of OlympusDAO is Convex Finance, which is an inventive DeFi protocol built on top of stablecoin exchange Curve Finance. FRAX3CRV is the stablecoin swap pool on Curve Finance consisting of FRAX, USDT, USDC, DAI. The strategy regarding this project is OHM provides liquidity in the FRAX3CRV pool on Curve Finance then stakes the LP on Convex to earn CRV & CVX.
- Depositing to different lending pools.
In the Aave protocols, OHM helps users maintain staked AAVE, stkAAVE, and earn incentives as a result, as well as provides liquidity for the DAI pool on AAVE V2.
With the above investing strategies, OlympusDAO has a monthly revenue of $2.10M.
Wonderland
Wonderland was the first fork of Olympus DAO and is considered the most successful one so far. Just like Olympus on Ethereum, Wonderland strikes to create a policy-controlled currency system on the Avalanche ecosystem. Wonderland is the first decentralized cross-chain reserve currency protocol on the TIME token, which can be staked in order to receive MEMO, which can be utilized to wrap and turn into wMEMO. With wMEMO, users can use them as collateral on partner platforms or bridge them towards other chains, without losing the rebalances.
In order to participate in the investment process, users must have wMEMO by staking and wrapping or users can buy wMEMO on the open market. The profit from staking wMEMO will be shared for users who own wMEMO.
The overall investing strategies of Wonderland:
- Staking in others vaults such as Convex, Abracadabra, Olympus and Aave-V2.
- Buying top tokens like BTC, MATIC, ETH,…
- Providing liquidity for liquidity pools such as Sushiswap, Curve Finance, etc.
Hector DAO
Hector DAO is a Fantom-based OHM fork. It offers the same incentive scheme and features of the original, with the only “novelty” being a “4,4 bond.” With each decision of withdrawing from Treasury, Hector DAO Governance considers users into the investing decision-making process by creating a proposal on Snapshot.io.
Hector DAO uses the Treasury to invest and purchase valuable tokens such as FTM, ETH, BTC, DOT, LINK, BNB, etc. By doing this, the protocol makes profits from trading the tokens in the market.
Not only that, Hector DAO also has investment strategy in Lending Pool like Aave. In this strategy, Hector DAO had analyzed the target project chart to figure out the best time to jump in and did multiple smaller transactions instead of a big one.
In the investing strategies of Hector DAO, the protocol also invests in low market cap projects such as Alchemy Pay, Travala, Verasity, Seoul Stars etc.
In conclusion, these platforms have three main similarities. The first one is that all of these platforms invest in other platforms by staking. Next, the above platforms also provide liquidity for various pools and stake LP tokens. Finally, buying top tokens is also a common strategy in the three platforms.
The above investing strategies have relatively high profit but along with it there might be some risks including an unpeg risk of providing stablecoins, obtaining unstable rewards and transaction fees, impermanent loss, hacking risks…
