OHM Token Crashes 30% Amid Liquidations And Profit-Taking

The OHM token crashes 30% amid the liquidations and profit-taking as the OlympusDAO Defi platform continued its downtrend so let’s take a closer look at today’s altcoin latest news.

The OlympusDAO’s decentralized OHM token crashes 30% as of this morning and this places the token at $131.19 per piece according to the data from CoinGecko. Since New Year’s day, the token dropped a total of 65% amid the broader crypto market bearish start of 2022 and the token slipped more than 90% since its all-time high of $1415 back in April 2021. since its inception last year, the OHM token made some strong waves into the crypto community and the interest has been mainly driven by the OlympusDAO design dubbed the “ponzinomics” as well as the staking rewards of the platform.

According to the Asia-based crypto reporter Colin Wu, before the latest downturn, these staking rewards offered users about 190,000% and now the rewards are 3720%. One of the key reasons behind today’s crash revolves around the influential trader dubbed “elsk” on Twitter taking profits from the OHM positions. An Ethereum transaction making the rounds on Twitter tied the trader to the sale of more than million worth of OHM for DAI.
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According to Etherscan, the transaction was executed on the DEX SushiSwap at about 9:00 EST on Sunday.

Beyond this sale, the data from Rari shows a cascade of liquidations and most of which were for levered longs on OHM. The liquidations added a lot of pressure too and OlympusDAO is a unique crypto experiment where the token is backed by the value of the project’s treasury. The treasury expands alongside the amount of OHM minted and distributed via the staking mechanism and the OHM bonds.

The users can buy discounted OHM tokens dubbed bonds in exchange for other cryptocurrencies like wrapped BTC or DAI or liquidity provision tokens from other exchanges. The bonds mature and realize their value after 15 epochs where one epoch is equal to 8 hours. Selling these bonds earns the protocol some money which is used to mint and to distribute more tokens to the users staking with OlympusDAO. With such high yields for staking, the users that collect more OHM are incentivized to turn around and to stake the tokens back with Olympus. The design was widely accepted by other projects with Olympus even launching a white-label bond solution that other projects can use dubbed OlympusRro. While the bonds are getting all the attention, their traction is doing little for the OHM price.