Olympus is a very nice consensus aggregation algorithm. Driven by interests, it has built a consensus worth of billions of US dollars in a short period of time. It remains true to the original aspiration of blockchain thanks to the fair token issuance mechanism, no institutional investment, and just token acquisition. The most beautiful thing is the bond mechanism. It is a perfect solution to the lack of protocol liquidity. Not only the protocol itself has sufficient liquidity, but also all the protocol participants can enjoy the yields passively from the growth of the Treasure for the long term.
Protocol can do a lot of things with the assets in its treasury, such as providing liquidity in other protocols to passively expand the treasury or using the assets in SynAssets to invest in other new protocols. We believe the bond mechanism will become the mainstream choice of most protocols in the future. We believe Olympus network effect is unstoppable.
Olympus has great achievements, but it has not a few obvious shortcomings: The consensus is fragmented. Each DAO can only anchor one asset; and if to anchor another asset, another DAO should be established.
The consensus algorithm should be further optimized. The invitation mechanism should be added in order to build an explosive consensus.
The deflation mechanism of Meme coin is an excellent consensus aggregation algorithm, but regretfully it has not been introduced.
Synthetix and Mirror and other synthetic assets have problems such as insufficient liquidity,low capital efficiency and liquidation risk ,we hope to bring the optimized Olympus into synthetic assets world to solve this problems,anchoring not only crypto assets such as DAI, BTC,ETH,but also real-world assets such as Apple and Tesla stocks,gold, futures, and indexes, etc. We will enter the era of synthetic assets 2.0 due to the addition of SynAssets.We can build more consensuses, and so as to integrate the crypto currency market with the traditional financial market.
Therefore, we early consensus participants have launched SynAssets.
No, SAT is not a stable coin. SAT is the platform coin for the entire SynAssets ecology. The open and fair IDO is adopted so that there are no pre-mining and team reservations. All the consensus participants can have opportunities to obtain SAT tokens through the whitelist.
SAT token holders are entitled to IDO, governance, etc. of all 5.5 Projects in the ecology. Moreover, the unlimited deflation mechanism is applicable to them.
Yes.The specific rules of the deflation mechanism are as follows: Assuming that the first sAssets project is named sMatic and the token is MAT. Users should hold Matic-SAT LP in order to participate in IDO (Initial Decentralization Offerings) so as to get MAT. After IDO finishes, Matic will be added to the liquidity pool, and SAT will be automatically destroyed. At the same time, MAT will enter Staking so as to get MAT rewards. That is to say, half of IDO funds will be destroyed. As a network aggregation, the existing SynAssets will launch more new sAssets. SAT market circulation will be decreasing, which will form an unlimited deflation mechanism.
Yes.Every token issued by sAssets will be governed by the deflation mechanism of Meme coin. Every transaction will be charged a tax of 8% (specific parameter governance), which will be automatically put into the liquidity pool. And LP will automatically donate to the Treasury.
Each sAssets token is backed by 1 DAI, not pegged to it. Because the treasury backs every sAssets token with at least 1 DAI, the protocol would buy back and burn sAssets token when it trades below 1 DAI. This has the effect of pushing sAssets token price back up to 1 DAI. sAssets token could always trade above 1 DAI because there is no upper limit imposed by the protocol. Think pegged == 1, while backed >= 1.
You might say that the sAssets token floor price or intrinsic value is 1 DAI. We believe that the actual price will always be 1 DAI + premium, but in the end that is up to the market to decide.
(5,5) is the idea that, if everyone cooperated in SynAssets, it would generate the greatest gain for everyone (from a game theory standpoint). Currently, there are five actions a user can take:
- If we both Stake & Stake(5, 5), it is the best thing for both of us and the protocol (5+5=10).
- If one of us Stake and the other one invite,it is also great because staking takes DAO token off the market and put it into the protocol, while invite more consensus participants to join(5 + 4 = 9.
- If one of us Stake and the other one bond,it is also great because staking takes DAO token off the market and put it into the protocol, while bond provides liquidity and Matic or DAI for the treasury(5 + 3 = 8).
- If one of us Stake and the other one deflation,it is also great because staking takes DAO token off the market and put it into the protocol, while deflation reduce token circulation(5 + 2 = 7).
- When we both sell, it creates the worst outcome for both of us and the protocol (-5 - 5 = -10).
As the protocol controls the funds in its treasury, sAssets token can only be minted or burned by the protocol. This also guarantees that the protocol can always back 1 sAssets token with 1 DAI. You can easily define the risk of your investment because you can be confident that the protocol will indefinitely buy sAssets token below 1 DAI with the treasury assets until no one is left to sell. You can't trust the FED but you can trust the code.
Every sAssets owns most of its liquidity thanks to its bond mechanism. This has several benefits:
sAssets does not have to pay out high farming rewards to incentivize liquidity providers a.k.a renting liquidity.
sAssets guarantees the market that the liquidity is always there to facilitate sell or buy transaction.
By being the largest LP (liquidity provider), it earns most of the LP fees which represents another source of income to the treasury.
All POL can be used to back sAssets. The LP tokens are marked down to their risk-free value for this purpose.
Fractional reserve banking works because depositors don’t withdraw their funds all at once. A depositor’s faith in the banking system rests on regulations and agencies like Federal Deposit Insurance Corporation (FDIC).
Every sAssets does not have FDIC insurance but it has an incentive structure that protects stakers. Let’s take a look at how it performs during a hypothetical bank run. In this scenario, we assume the majority of stakers would panic and unstake their tokens from Every sAssets - the staking percentage which stands at 92% now quickly collapses to 3.3%, leaving only 55,000 Every sAssets staked.
Next, we assume the Risk-Free Value (RFV) inflows to the treasury completely dry up. For context, RFV is currently growing at about $1 million every 2 days. However, during a bank run this growth will likely stop.
Finally, we assume that those last standing stakers bought in at a price of $500 per Every sAssets. The initial investment of these stakers would be:
$500/sAssets token∗55,000 sAssets token=$27.5 million
As of September 15 2021, the total sAssets token supply is 2,082,553 and the RFV is $47,041,833. Remember that 1 sAssets token is backed by 1 USD (DAI or FRAX or other token). By subtracting these two numbers, we know 44,959,280 sAssets token will eventually get issued to the remaining stakers. In roughly a year, these stakers who are holding 55,000 sAssets token will have:
55,000+44,959,280=45,014,280 sAssets token
$27.5 million investment MAT by these stakers will turn into about $45 million based on cash flow alone if they stay staked (recall that 1 sAssets token is backed by 1 USD). In this bank run scenario, the stakers who stay staked not only get their money back, but also make some profit. Therefore, (3,3) isn’t just a popular meme, it is actually a dominant strategy.
The above scenario is unlikely to play out because when other people find out that extremely high rewards are being paid to the stakers, they will copy the strategy by buying and staking sAssets token. This is also why the percentage of sAssets token staked in Olympus has consistently remained over 90% since launch.
It is extremely important to understand how early in development the SynAssets protocol is. A large amount of discussion has centered around the current price and expected a stable value moving forward. The reality is that these characteristics are not yet determined. The network is currently tuned for expansion of sAssets token supply, which when paired with the staking, bonding, and yield mechanics of sAssets, result in a fair amount of volatility.
sAssets token could trade at a very high price because the market is ready to pay a hefty premium to capture a percentage of the current market capitalization.
However, the price of sAssets token could also drop to a large degree if the market sentiment turns bearish. We would expect significant price volatility during our growth phase so please do your own research whether this project suits your goals.
When you buy and SynAssets token, you capture a percentage of the supply (market cap) which will remain close to a constant. This is because your staked sAssets token balance also increases along with the circulating supply. The implication is that if you buy sAssets token when the market cap is low, you would be capturing a larger percentage of the market cap.
Rebase is a mechanism by which your staked sAssets token balance increases automatically. When new sAssets token are minted by the protocol, a large portion of it goes to the stakers. Because stakers only see staked sAssets token balance instead of sAssets token, the protocol utilizes the rebase mechanism to increase the staked sAssets token balance so that 1 staked sAssets token is always redeemable for 1 sAssets token.
Reward yield is the percentage by which your staked sAssets token balance increases on the next epoch. It is also known as rebase rate.
APY stands for annual percentage yield. It measures the real rate of return on your principal by taking into account the effect of compounding interest. In the case of sMatic, your staked MAT represents your principal, and the compound interest is added periodically on every epoch ,thanks to the rebase mechanism.
One interesting fact about APY is that your balance will grow not linearly but exponentially over time! Assuming a daily compound interest of 2%, if you start with a balance of 1 MAT on day 1, after a year, your balance will grow to about 1377. That is a lot!
As illustrated above, your sAssets token balance will grow exponentially over time thanks to the power of compounding. Let's say you buy an sAssets toke for $400 now and the market decides that in 1 year time, the intrinsic value of sAssets token will be $2. Assuming a daily compound interest rate of 2%, your balance would grow to about 1377 sAssets tokes by the end of the year, which is worth around $2754. That is a cool $2354 profit! By now, you should understand that you are paying a premium for sAssets toke now in exchange for a long-term benefit. Thus, you should have a long time horizon to allow your sAssets toke balance to grow exponentially and make this a worthwhile investment.
The intrinsic value of SAT tokens is closed related to the development of the ecology, and the number and efforts of consensus participants as well.
There is no clear answer for sAssets token, but the intrinsic value can be determined by the treasury performance. For example, if the treasury could guarantee to back every sAssets token with 100 DAI, the intrinsic value will be 100 DAI. It can also be decided by the sAssets. For example, if the sAssets decides to raise the price floor of sAssets token, its intrinsic value will rise accordingly.
Let’s say the protocol targets an APY range of 1,000% to 10,000%, this would translate to a minimum reward yield of about 0.2105%, or a daily growth of about 0.6328%.
If there are 100,000 of sAssets token staked right now, the protocol would need to mint an additional 632.8 sAssets token to achieve this daily growth. This is achievable if the protocol can bring in at least $632.80 of daily revenue from bond sales. Even if the protocol doesn't bring in that much revenue, it can still sustain 1,000% APY for a considerable amount of time (see the runway chart for instance) due to the excess reserve in the treasury.
No. Once you have staked sAssets token, your staked sAssets token balance will auto-compound on every epoch. That increase in balance represents your rebase rewards.
You can track your rebase rewards by calculating the increase in your staked sAssets token balance.
1. Record down the Current Index value on the staking page when you first stake your sAssets token. Let's call this the Start Index.
2. After staking for some time, if you want to determine by how much your balance has increased, check the Current Index value again. Let's call this the End Index.
You can go to the consensus network pool to check the available rewards. You can also check the rewards in the next stage through Next Reward Amount.