OlympusDAO is a DeFi protocol and DAO on Ethereum, launched in March 2021 by a pseudonymous founder known as “Zeus”. It is built around OHM, a free-floating token backed by an on-chain treasury rather than pegged to the dollar. Olympus's lasting contribution to the field is protocol-owned liquidity (POL) — the idea, now widely copied, that a protocol should own the reserves and market depth that back its token instead of renting them from mercenary liquidity providers. That single design choice reshaped how DAOs think about their treasuries and tokenomics; the reflexive incentive scheme wrapped around it made Olympus one of the most-studied cautionary tales in the same breath.

Bonding and protocol-owned liquidity

Most protocols bootstrap a market for their token by liquidity mining: paying outside providers in freshly minted tokens to deposit into a pool. The liquidity is rented — it leaves the moment a better yield appears, and the emissions dilute holders. Olympus's answer was bonding: the protocol sells OHM at a small discount in exchange for liquidity-pool tokens and reserve assets such as DAI and LUSD, and keeps them. Over time the treasury comes to own the liquidity backing OHM outright, so the depth cannot walk away. Olympus later packaged this as a service (“Olympus Pro”) that let other DAOs buy their own liquidity the same way, and the bonding-plus-rebasing template spawned a wave of imitators — the “OHM forks” — across the 2021 cycle.

(3,3), rebasing, and the boom-bust

Bonding built the treasury; staking was meant to keep OHM off the market. Stakers received sOHM that rebased with a very high advertised APY, and the famous “(3,3)” meme framed staking as the cooperative, game-theoretically dominant move — if everyone stakes and nobody sells, the price holds. Six-figure APYs and that reflexivity drove OHM into four figures and the protocol's market capitalization into the billions during 2021, prompting a very public debate over whether Olympus was “the future of money or a Ponzi.” When the incentive to stake weakened, the same reflexivity ran in reverse: OHM fell more than 90% through 2022. It is a textbook study in how token designs that pay for their own price fail — the yield was denominated in the very token whose value it was supposed to support.

The reinvention: Cooler Loans, and the retirement of Range Bound Stability

After the crash, Olympus kept the protocol-owned treasury and dropped the high-APY rebasing story. OHM v2 (October 2021) introduced the gOHM wrapper — a non-rebasing, governance-bearing ERC-20 used for on-chain voting. The protocol then rebuilt around backing, not yield. Range Bound Stability (RBS) deployed the treasury to buy and sell OHM inside a defended price band, so the treasury itself supplied the market depth — but it is no longer running. Olympus's own documentation marks RBS “currently disabled” (checked 8 September 2026) and has split its two halves across separate policies: the Yield Repurchase Facility holds the lower bound, drawing the yield the treasury earns on its USDS reserves and Cooler loans and spending it on daily OHM buybacks (authorised by OIP-163 and OIP-164), while the Emissions Manager holds the upper one, releasing new OHM through convertible-deposit auctions only while the market price carries a governance-set premium to backing. Cooler Loans let gOHM holders borrow stablecoins (USDS) against the reserves backing their tokens at a fixed 0.5% APR — perpetual, with no expiry, no external oracle and no price-based liquidation, because every gOHM is backed by USDS in the treasury. Olympus's docs call the facility “permissionless, immutable, and governed by Olympus smart contracts”; the current design is Cooler V2, whose rate was set by OCG Proposal 8.

How Caper approaches this

Olympus's durable insight was that a protocol should not rent the liquidity that backs its token — it should own it. But Olympus had to buy that liquidity through bonding and then defend a floating “backing per token,” and the (3,3) reflexivity turned that into a boom-bust. A caper keeps the ownership and drops the discretion. Its bonding curve is the reserve: the XRD paid on every buy accrues into the curve's own inventory vault, and any holder's exit is priced by the same closed-form integral against that vault — so exit liquidity is structural rather than incentivized, with no rented LPs, no emissions to defend, and no floating backing ratio to game. There is no six-figure APY drawing capital in and no reflexive spiral when it leaves; the reserve that lets you sell back is the reserve your purchase created. (Verified against contracts/logic/src/lib.rs.)

References

• OlympusDAO — official site
• Olympus Docs — protocol overview (OHM, POL, RBS, Cooler Loans)
• Olympus Docs — Protocol Owned Liquidity
• Olympus Docs — Cooler Loans
• CoinDesk (Dec 2021) — “Olympus DAO Might Be the Future of Money (or It Might Be a Ponzi)”
• IQ.wiki — Olympus DAO (history, OHM v2 / gOHM, bonding)
• Olympus Docs — Range Bound Stability — carries the “currently disabled” notice and names the two policies that replaced it.
• Olympus Docs — Yield Repurchase Facility; Olympus Docs — Emissions Manager — the lower and upper bounds RBS used to hold.