What is Olympus DAO (OHM) and the "(3,3)" meme?

Understanding Olympus DAO and Its Core Mechanism

1. Olympus DAO operates as a decentralized reserve currency protocol built primarily on the Ethereum blockchain. It introduces a new model for stable asset backing by holding various cryptocurrencies in its treasury, such as DAI, FRAX, and ETH. Unlike traditional stablecoins pegged to fiat currencies, OHM is not pegged but instead derives its value from the assets held in the protocol’s reserves, giving each OHM token intrinsic backing.

2. The protocol mints OHM tokens and sells them through bonds. These bonds allow users to purchase future OHM tokens at a discount in exchange for providing liquidity provider (LP) tokens or stablecoins. This mechanism enables Olympus to accumulate assets in its treasury while incentivizing early participation. Bonding provides a funding stream that strengthens the protocol’s financial foundation.

3. Staking plays a central role in Olympus DAO. Users who stake their OHM tokens receive additional OHM over time through a process called rebase. The rebase occurs every eight hours and increases the staker’s balance automatically. This compounding effect encourages long-term holding rather than selling, aligning user incentives with the protocol’s growth.

4. The protocol distributes a portion of bond revenue to stakers, creating a yield that is sustained by protocol-owned liquidity rather than external investors. This shift from investor-owned to protocol-owned liquidity aims to create a more sustainable and decentralized financial structure, reducing reliance on external market makers.

The Origin and Meaning of the “(3,3)” Meme

1. The “(3,3)” meme originated from game theory within the Olympus DAO community, specifically referencing the payoff matrix of the prisoner’s dilemma. In this context, if two players both cooperate, they each receive a reward represented as (3,3). If both act selfishly, they get a lower outcome. The meme symbolizes mutual cooperation and trust between participants in the ecosystem.

2. In the OHM community, “(3,3)” evolved into a shorthand expression of collective alignment. When users stake or bond, they are seen as choosing cooperation—supporting the protocol for mutual benefit. Conversely, selling OHM is interpreted as defection, leading to outcomes closer to (1,1) or (0,0), where trust breaks down and value erodes.

3. Community members use “(3,3)” in forums, social media, and wallet addresses to signal their commitment to the protocol’s long-term success. It has become a cultural identifier, reinforcing a shared belief in decentralized cooperation and financial sovereignty.

4. The meme transcends mere humor; it encapsulates the philosophical foundation of Olympus DAO—value creation through coordinated action rather than extraction. It reflects a shift in how decentralized communities conceptualize trust, incentives, and collective outcomes.

Impact of Olympus DAO on Decentralized Finance

1. Olympus DAO introduced the concept of protocol-controlled value, where a project owns its liquidity instead of renting it through incentives. This model reduces slippage, increases price stability, and allows the protocol to capture long-term revenue from its own ecosystem.

2. The success of Olympus inspired a wave of “forks” and similar protocols, such as Tokemak, Alchemix, and Wonderland. These projects adopted variations of bonding and staking mechanisms, spreading the idea of protocol-owned liquidity across DeFi.

3. By decentralizing control over treasury assets and governance, Olympus empowers token holders to vote on key decisions, including bond parameters and treasury allocations. This governance model reinforces community ownership and resilience against centralized manipulation.

4. The high APYs generated through staking initially attracted significant capital, although they also raised concerns about sustainability. Over time, Olympus shifted toward more conservative emission rates and diversified revenue streams to ensure long-term viability.

5. The protocol’s transparency, with all treasury holdings publicly verifiable on-chain, strengthens trust among participants. Real-time dashboards display bond sales, staking metrics, and treasury composition, enabling informed decision-making by the community.

Frequently Asked Questions

What does OHM staking actually do?Olympus staking allows users to deposit OHM tokens into the protocol and earn additional OHM through periodic rebases. These rebases occur every eight hours and are funded by revenue from bond sales. Stakers grow their holdings over time without selling their position, reinforcing protocol stability.

Is OHM a stablecoin?No, OHM is not a stablecoin. While it is backed by reserve assets in the treasury, its price is not pegged to any external asset. OHM’s value fluctuates based on market demand and the perceived strength of the protocol’s backing and governance.

How does bonding benefit the Olympus protocol?Bonding allows Olympus to acquire assets like LP tokens or stablecoins in exchange for discounted OHM. This strengthens the treasury, increases protocol-owned liquidity, and reduces reliance on external liquidity providers. The acquired assets generate yield or secure trading pairs, further benefiting stakers.

Why is the prisoner’s dilemma important to OHM culture?The prisoner’s dilemma illustrates the tension between individual gain and collective benefit. In OHM’s context, choosing to stake or bond represents cooperation (3,3), while selling represents defection. The meme reinforces the idea that long-term success depends on widespread cooperation within the community.