OHM, the native token of decentralized finance (DeFi) protocol Olympus, plunged by nearly 35% at around 2 am UTC on January 17, as a whale unloaded OHM 82.526 (worth USD 13.3m at the time), which triggered a series of liquidations that exacerbated the price drop.
In terms of market capitalization, OHM shed nearly USD 474m following the sell-off, plummeting from USD 1.35bn to around USD 877m in an hour.
At 8:46 UTC, OHM is trading at 128.03, down by 30.4% over the past 24 hours and 47.2% in a week.
Journalist Colin Wu reported that prior to the dump, OHM’s “pledged APY [annual percentage yield] had reached 190,000%.” However, that figure has dropped to 3.830%, according to the project’s website.
Meanwhile, some users have pointed out that OHM has been trending downward for weeks now, arguing that this was inevitable.
“I have a theory as to why the bubble started bursting 6 weeks ago, I’ll flesh out at some point but- its a bit ironic. They went from pure ponzi to actually trying to turn legit. They went from OHM to gOHM which no longer confuses people on rebases. And the greed then dissipated,” one user said.
In fact, just last week the coin fell from its local peak of USD 264 to USD 161 on Monday, plummeting by around 30%. Zooming out, the coin has been in a downtrend since it hit an all-time high of USD 1,415 in April 2021. OHM price is down by 91% since then.
Olympus, which is governed by a decentralized autonomous organization (DAO), provides financial services by relying on smart contracts. It says it strives to create a “non pegged stablecoin” that is backed by crypto instead of fiat currencies.
However, the coin’s offered unprecedented APY rates of thousands of percentages has made some skeptical of its sustainability, with some even calling the project a scam.
Another criticism of the project is that the value of OHM tokens is set by both the project’s treasury of assets as well as the DAO. Some users claim that the DAO is the only entity responsible for setting the price, which is not meaningful and thus subject to extreme volatility.
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