Background
Our plans beyond our first NFT launch
Over the past several years, crypto investors have looked to DeFi in the hopes of finding an financial asset class with the safety profile of a savings account, but with double digit (or more) passive yield in addition to exposure to the significant long-term asset price appreciation.
For a time during the 2020-21 bull market, algorithmic stablecoins seemed to be the way forward.
A common issue with algorithmic stablecoins that are pegged to baskets of other cryptocurrencies is exposure to volatility in the reference assets. Stablecoin ecosystems such as OlympusDAO (DAO stands for Decentralized Autonomous Organization) have constructed a common approach to maintaining some level of price stability against that volatility. Various mechanisms enable the protocol to preserve the value of tokens, preventing them from falling below a floor. Floors that during this current bear market where reached, and then broken.
The bear market has exposed deficiencies in the treasury management and tokenomics of the teams behind many of these DAOs. While the DAO concept itself still holds, the reality is that in the long run, you can only have at most two of high yield, high appreciation, and high safety. Further, our hypothesis is that backing the token with real world assets that are tied to real world supply/demand dynamics provides a firmer floor than algorithmic stablecoins whose floors are based on the value of token pairs.
In other words, rather than further financialization, the crypto world should instead move towards tokenization of real assets.