OHM, launched by OlympusDAO, is a DeFi project aiming to become a decentralized reserve currency. The core concept of Olympus DAO is to establish an asset treasury within the protocol itself to support its issued OHM tokens, thus giving OHM the characteristic of being "asset-backed but not pegged to a fixed exchange rate."
Specifically, its mechanism includes two key components:
Bonding: Users contribute assets to the protocol using stablecoins or liquidity tokens (LPtokens). The protocol issues discounted OHM value and adds it to the treasury, thereby increasing the assets controlled by the protocol.
Staking: OHM holders can stake their tokens to earn rebase rewards, increasing their OHM holdings. The protocol distributes more OHM to stakers through inflation.
Therefore, Olympus DAO attempts to break away from the traditional stablecoin-pegged model. While its OHM is backed by a "price floor" (such as the value of each OHM coin being supported by vault assets), it does not promise a strict 1:1 peg to a particular stablecoin, but instead allows the market to float freely.
