Olympus DAO has cut the OHM token’s annual percentage staking yield to 7.35% in the hope of making the protocol sustainable. The rewards were reduced after the DAO approved a governance proposal called OIP-119.
In a Thursday Twitter thread titled “Say bye to high APY,” the project clarified that while the DAO’s prior objective was to bootstrap adoption by offering very high yield, it’s transitioning to a new tokenomics framework.
Olympus DAO is a DeFi protocol with a treasury that backs the OHM token. It has a two-pronged approach to its operations, according to its website. The first is via cryptocurrency bonds denominated in vested OHM tokens. Here, the DAO issues OHM tokens at a discount to investors in exchange for their cryptocurrencies, a process designed to grow its treasury over time.
The second is single-side staking of OHM tokens. Currently, the official website shows this yield to be 267% APY, paid to those who deposit OHM to its single-side token staking pool.
After the latest governance proposal, this specific staking yield (also called “base rate”) will be lowered to 7.35%, the DAO said. This change will help the project achieve more sustainable growth, the DAO explained.