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Why This Token Thrives With A 38% Profit While Bitcoin And Ethereum Bleed

Altcoins 2021/07/20 00:11 by Reynaldo Marquez

Algorithmic currency protocol OlympusDAO (OHM) has been outperforming Bitcoin and Ethereum despite the recent downtrend. In the 7-day and 30-day charts, OHM records a 38% and 126% profit, respectively.

A report published by Delphi Digital concludes that OHM has been displaying countercyclical behavior. As reported by NewsBTC back in April, this protocol took the market by storm when its native token recorded impressive gains in almost every metric.

OlympusDAO has sustained the growth reaching all-time highs in Total Value Locked (TVL) and treasury, as Delphi Digital recorded. The investment firm said:

OlympusDAO’s token (is) making investors a fair amount of gains while the broader market pulls back.

Ethereum ETH OlympusDAO OHMSource: Delphi Digital

In that sense, the high-risk OHM token could be amongst the crypto market’s most promising assets, the firm added. However, they believe that the current outlook for these types of investments is unfavorable.

Ethereum and Bitcoin have been moving in a range for the past weeks. Investors expect a rise in volatility, but Delphi Digital suggests the opposite scenario due to a decline in Implied Volatility versus Realized Volatility in the BTC options market after May and June’s selloffs.

Bitcoin BTC BTCUSDSource: Delphi Digital

In this scenario, most of the top cryptocurrencies increase their correlation with Bitcoin. Even after Ethereum outperformed BTC’s price, Delphi Digital finds it unlikely that ETH will diverge from the general trend in the market.

ETH’s 25 delta skew looks identical to BTC with one noticeable difference: there was no up tick in the last few days. You might consider this a plus for ETH, but it probably doesn’t matter because ETH will just follow BTC anyway.

Ethereum ETH ETHUSDSource: Delphi Digital

What OHM Is Doing To Outperform Ethereum And Bitcoin

OHM has been able to break away from the trend on the back of three main factors, according to the report: its community, and an Ohmie cards campaign offerings users up to 10,000+% in APYs.

This protocol’s community has customized a set of 390 “Ohmie Cards” with the potential to create up to 610 more for a 1000 total. The card can be used to issue Non-Fungible Tokens (NFTs) paintings and auctioned them to users.

In addition to Delphi Digital’s argument on OlympusDAO, the protocol stability mechanism has proven to be profitable. Its treasury has risen 117% in terms of risk-free value and 120% in market value, per data shared in their June review.

This made OlympusDAO the fifth protocol in terms of monthly revenue on the Ethereum DeFi sector. Only Uniswap, Aave, SushiSwap, and Compound, some of the most popular DeFi platforms, scored higher in this metric, as seen below.

OHM OlympusDAOSource: OlympusDAO

If the coming months bring more volatility into the market, OMH could be a viable alternative for traders looking to generate yield with a seemingly uncorrelated token. OlympusDAO’s report added:

The sole purpose of Olympus is to accrue value to the network and OHM token, unlike other protocols that must balance value accrual between the holders of the token and the users of the protocol. The value fragmentation and incentive misalignment that is inherent to any class-based network is absent from ours.

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