OlympusDAO's OHM token is backed by collateral in its treasury. Users are issued new OHM tokens when they contribute to the treasury. This mechanism is called 'bonding'.

It should be noted that OHM is not a stablecoin and its value does not mirror the assets in the treasury on a 1:1 basis.

Treasury Addresses

In this post I investigate the value of the assets in OlympusDAO's treasury.

Olympus has three addresses associated with its treasury:

• Treasury V1 (this address is now deprecated),
• Treasury V2, and
• Treasury V3,

Assets in the Treasury

Using ethereum.erc20_balances, I track the combined daily balance of the treasury addresses previously identified:

Some of the main assets in the treasury are DAI, FRAX and wETH. The treasury used to include a lot of LUSD (shown in grey). These LUSD have now been divested.

It is a good practice to validate the data against an official source. In this case I verify the treasury balance published on OlympusDAO's website.

Validating the Findings

What could explain the difference?

The ethereum.erc20_balances table does not show all types of crypto assets. For example, LP tokens are not included.

I check the balances of the Treasury addresses on Etherscan to find out if they hold LP tokens.

Reconciling the Data

The OlympusDAO website shows a much larger treasury of $423M.

The Treasury V3 address includes more than $115M in LP tokens which were not captured in my query above.

Image taken on April 16, 2022. Source: https://app.olympusdao.finance/#/bonds

There is another challenge with using ethereum.erc20_balances. When querying the treasury balance, we see several tokens with no pricing information. Some tokens appear on the balance sheet, but they have no USD valuation. These tokens could be from lesser-known partners of Olympus. The value of tokens without pricing information may constitute the rest of the Treasury's balance sheet.

LP tokens in OlympusDAO Treasury V3, April 16, 2022.

By adding the value of LP tokens to the treasury balance from ethereum.erc20_balances, we get closer to the $423M published on OlympusDAO's website. Nevertheless, close to $100M in balances are not reconciled.

Why?

Wrapping it Up

Here are my main takeaways from exploring OlympusDAO's treasury:

• The treasury serves as collateral for the OHM token.
• The value of the OHM token is not pegged to the assets in the treasury.
• A large portion of the treasury consists of stablecoins, namely DAI and FRAX.

• Growth in the value of the treasury has slowed down since December. This could be due to depressed valuations of most cryptocurrencies.

A substantial share of the treasury consists of lesser-known tokens with no valuation in Flipside's database. Further research could investigate how Olympus values these assets.

Thank you for reading!