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Tutorial: How to Stake Ohm on Olympus
zachdavidson.eth
0xE8B0
October 22nd, 2021

OlympusDAO is the creator of OHM, a free-floating reserve currency backed by a basket of crypto assets. Used as a means of hedging against the crypto market’s volatility, OlympusDAO focuses on supply growth rather than price appreciation to stabilize the value (but not necessarily the price) of OHM.

How does this work?

First, every OHM token is backed by 1 DAI, but not necessarily pegged to it. While a peg would imply 1 OHM = 1 DAI, backing implies 1 OHM >= 1 DAI. This means there’s no upper limit to the value of 1 OHM, but there is a lower bound — 1 DAI. Or, put differently, the intrinsic value of 1 OHM is 1 DAI, but the market price will almost always be 1 DAI + a premium.

To maintain the value of tokens held in the treasury, OlympusDAO uses a bond mechanism to generate profits for the protocol + staking rewards to incentivize holders to stake/provide liquidity for the protocol. OlympusDAO will either issue OHM if the price spikes, or buy back + burn it if the price drops. Stakers reap the benefits of this, earning rebase rewards as a result of bond sales. The result of all of this? Even if the price of OHM drops below your purchase price, given a long enough staking period, your staked OHM balance should increase at a faster rate than the price decline.

In this tutorial we’ll explore how to stake OHM. Once completed, you’ll officially be (3,3).

What happens when you stake OHM?

When someone stakes their OHM, their tokens get locked in the protocol + they get sOHM in return — a synthetic asset equal to the total value of your staked OHM. There is a “rebase” (a mechanism to increase your staked OHM balance) every 8 hours where the Olympus protocol mints new OHM, and most of that newly minted OHM goes to stakers.

The game theory incentives in the Olympus ecosystem are in favor of stakers — since staking + bonding are beneficial to the Olympus protocol, OlympusDAO provides benefits to those that help them; conversely, if you sell your OHM, you “harm” the protocol (by providing downward pressure on the OHM price)+ no longer receive staking rewards as a result.

The game theory matrix below explains the (3,3) meme:

(Stake, Stake) = (3,3)
(Stake, Stake) = (3,3)

If you stake, both you + the protocol benefit, creating the best outcome for all involved.

Now let’s explore how to (3,3).

How to Stake OHM

STEP 1: Before you can stake OHM, you need to get some in your wallet. There are two ways to do this — a) swap for it at the current market price on your favorite DEX or b) buy bonds from the OHM treasury. (The latter gives you a slight discount to the price of OHM and is the cheapest way to get OHM tokens. You can learn more about OHM bonds here.)

NOTE: OlympusDAO recommends swapping DAI for OHM to minimize slippage, but you can swap any token in your wallet for OHM if you so choose.

STEP 2: Select your input currency + set the output currency as OHM. Add the amount of OHM you want to swap for, click Approve, and sign the transaction. Once approved, you’ll be able to press Swap to complete your token swap.

If you don’t see OHM tokens in your wallet, you can add the contract address manually.

STEP 3: Once you have OHM tokens in your wallet, navigate to the OlympusDAO website, connect your wallet, and click on the "Stake" tab on the left side of the UI.

STEP 4: Enter the amount of OHM you want to stake, or push the “Max” button if you want to stake all the OHM in your wallet.

STEP 5: The “Stake OHM” button should say “Approve” the first time you use the OHM interface. Click Approve and sign the transaction in your wallet. (This is only needed the first time you stake/unstake.)

STEP 6: After signing the Approve transaction, the button should then say “Stake OHM,” as it does in the photo above. Click the button to stake your desired amount of OHM, and sign the transaction one more time.


Congratulations! You’ve officially staked OHM and joined the (3,3) family.

Welcome, fellow Ohmie 😎

(3,3)

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