Over 200 of you voted for the topic of today's thread, and it is very clear you all want to know my perspective on where OHM will be (or should aim to be) in 5 years. Let's dive in!
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twitter.com/WartuII/status/1539003916721049600?s=20&t=jBdHACxVpPik052tYyhb0Q
First of all, it is important to state that this is my personal opinion, not the opinion of the DAO. Also, this is purely where I would like Olympus to be in the future, not a guarantee (looking at you SEC)
So what is the role of OHM, Olympus, and the DAO in 5 years? Well, it shouldn't come as a surprise to you that I think we will be well on our way to be the reserve currency. Not only in DeFi, which is our initial scope, but for the entire industry.
What is a reserve currency? Well the definition on this varies wildly but often is cited as:
A strong currency, widely used in international trade, that a central bank is prepared to hold as part of its foreign exchange reserves.
If you translate that to our industry, it becomes:
A strong currency widely used in the economy that large entities are prepared to hold as part of its reserves.
Let's look into what makes a currency a reserve currency. Generally you need 3 elements:
- You need to be a large and influential actor in your space
- You need to show (relative) stability as a currency
- You need to be widely accepted as a currency
Where are we today on these 3 metrics?
1. We are a sizeable player, yet not 'incontournable'
2. We are moving towards a ranged stability model and have been improving on volatility
3. We are far from being a currency, yet baby-steps have been taken
So what would a future look like for Olympus in these 3 key areas?
Olympus should become a very large player in the industry it wants to operate in. Think of the Federal Reserve in the regular economy or, more close to home, FTX in our weird little world. Both have significant influence, either through governmental support or gathered wealth.
In 5 years, Olympus should have build up a huge treasury which is diversified and managed with the utmost transparency in an extremely cautious manner. I'd say Olympus should aim to be larger than any centralized (corporate) player in the space. Think 12 digits big.
It should be an influential actor, this can be achieved in multiple ways by holding strategic assets (think voting power), by asserting thought leadership, by simply the size of Olympus's holdings or by building up a reputable reputation.
This can be compared to the role of the dollar in the world economy, where the influence is derived from the military, economic and (maybe contested by some) academic power of its country. There is a reason why last week, everyone was watching the FED.
It should be able to perform 'Central Bank' activities, such as be a lender of last resort. It should be able to stabilize the industry in times of volatility through its monetary policies. Think of the recent role of FTX in providing BlockFi with a 250 million dollar credit line
An excellent thread on this by @AnthonyLeeZhang and response by Zeus goes into this! twitter.com/AnthonyLeeZhang/status/1539283596594266115?s=20&t=sikpoFtfZv0Xpfiy0FzHYA
OHM will have to become more stable, but not just in price. First and foremost, in 5 years we should've shown consistency and stability in our (monetary) policy. Only in this case, large entities would be willing to hold OHM as a reserve currency.
This is one of the major selling points for Olympus. Rather than a policy influenced by geopolitical motives, Olympus will be a more stable and neutral actor in its monetary policy. We don't have to mint billions to send out stimulus checks, so we can win the next election.
Stability of price, an important requirement for people to be able to use your currency as an actual currency. However, don't think of stability as being pegged to a certain price point. In 5 years, OHM will be relatively stable, but fluctuations will still happen.
It's this unpegged nature that will make it possible for Olympus to continue to grow through bond issuance or perform Central Bank actions as described above.
Stability of purchasing power will be a key focus in 5 years. . Holding OHM should be your safe haven against inflation, basically a better version of a savings account but this time, the bank doesn't take a nice big fee.
And finally, the most difficult one to predict, being a currency. It's difficult to predict since it depends on many external factors. Yet, I think in 5 years $OHM will be widely accepted throughout our industry and hopefully outside that as well.
We have seen integration already with @viaMover, allowing people to spend their $OHM in the real world. You should be able to buy NFT's with $OHM, post it as collateral (@vestafinance) and use it much like (W)ETH is used today in DeFi.
It should become a common denominator. In 5 years, hopefully many pools/exchanges (or whatever the innovative devs are going to throw at us) will denominate pairs in $OHM. But maybe also raises for new projects can be done in $OHM (plug to @Artemis_HQ here).
And there will have to be sufficient liquidity to go from $OHM to any other asset you would like. I think on this front we have already done extremely well, but it should vastly be expanded in 5 years time.
All these elements would allow large entities like major stablecoin issuers, projects, trading funds, VC's etc to hold $OHM on their balance sheets since it will be a major player in the industry. Not holding it would be seen as mismanagement.
You should feel comfortable that, at any time, you can exchange $OHM for any asset without incurring much slippage.
Hopefully it struck you that at no point in time I was talking about buying and selling $OHM. This is on purpose. My largest conviction is that if we build Olympus with the right vision in mind, in 5 years you won't think of $OHM as an asset you trade, buy or sell.
My hope and believe is that we will treat it as the currencies we hold in our wallets or bank accounts. When I buy an overpriced Starbucks coffee, I'm not selling my dollars for the coffee. I'm exchanging it for another asset.
I don't see my dollars or euros in my bank account as investment (in fact, one could argue it's a terrible investment). In the future, $OHM will serve the same roll, without you losing 9% YOY in purchasing power.
As said at the start, this is where I think we should and will be. We don't know what will happen over the next 5 years, but I hope it's clear that what Olympus is trying to do is unique in this market and is badly needed in our industry.
Till next time!