OlympusDAO Co-Founder Doxxed? Lawsuit Claims to Unmask 'Apollo'

An early Olympus investor alleges he was cheated out of millions of OHM tokens when key smart contracts were rendered inoperable.

AccessTimeIconApr 14, 2022 at 7:11 p.m. UTC
Updated Apr 14, 2022 at 11:42 p.m. UTC
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Sam is a reporter at CoinDesk focused on decentralized technology, DeFi and DAOs. He owns ETH, BTC and MATIC.

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A lawsuit filed Thursday in the U.S. District Court for Connecticut alleges that co-founders of the OlympusDAO decentralized finance (DeFi) project cheated an early funder out of nearly 4 million in OHM tokens, which are now worth at least $20 million.

In what may be an unprecedented case testing the limits of pseudonymity in decentralized autonomous organizations (DAOs), the lawsuit names a Connecticut resident as the supposed identity behind “Apollo,” one of Olympus’s pseudonymous co-founders.

CoinDesk has not independently verified the identity of the alleged Apollo and has reached out to the individual named in the lawsuit, Daniel Bara, for comment.

What is OlympusDAO?

The Ethereum-based OlympusDAO project has been one of the most talked-about – and most controversial – experiments to enter the world of DeFi in the past year.

The project sought to establish its native OHM token as a digital reserve currency through a mix of memes and game theory, but its price famously tanked 95% this past winter.

The OHM token now sits at $28 according to CoinMarketCap, down from a $1,300 peak in October.

The complainant in the lawsuit filed Thursday, Australia-based investor Jason Liang, says he agreed to promote OlympusDAO and paid $50,000 in DAI (a U.S. dollar-based stablecoin) in a private funding agreement in exchange for 4 million pOHM, a precursor to OHM. According to an Olympus Medium post, investors like Liang were later able to mint 1 OHM in exchange for 1 DAI and 1 pOHM.

In his suit, Liang alleges that after he started selling some of his Olympus tokens, the Olympus team punished him by rendering inoperable the smart contracts enabling him to redeem pOHM for OHM.

Liang says the Olympus team’s ability to meddle with key smart contract functionality undermines claims that the project is decentralized.

According to the lawsuit, the Olympus team also used pseudonymity to protect its members from liability.

Liang alleges that a token purchase agreement (TPA) between him and Olympus stated that money raised in the private funding round would go to a company that didn't actually exist. With the identities of Olympus’s founders a secret, the lack of an officially registered company behind the fundraiser was, according to the lawsuit, designed to make it difficult for an investor like Liang to pursue legal action against the project.

The suit says Liang's legal team identified Apollo by doing a reverse lookup on a phone number Apollo used to call Liang. The name behind the phone number matches one that was signed on the token purchase agreement that Liang originally thought was fictitious.

In an email to CoinDesk, Joseph B. Evans, an attorney for Liang, said: “There is a completely legal and legitimate way to run a DAO. This isn't it. It appears that certain organizations still believe they can avoid liability if their founders and promoters hide behind screen names, social media handles and fictitious entities. My client provided much needed start-up capital to Olympus, and he is entitled to share in its success.”

Is OlympusDAO an ‘honest Ponzi’?

When OlympusDAO was launched last year, the project's unique bonding and staking mechanics promised staggeringly high returns to investors in the realm of 10,000% annual percentage yield (APY). In order for the system to work, OHM holders were encouraged to interact with Olympus’s smart contracts according to a set of game theory principles "memefied" by the project’s community.

"Hodling," buying, and staking OHM would theoretically guarantee steady, sky-high returns for the whole community. Selling, like Liang did, was sacrilege.

A flock of vocal critics dismissed OlympusDAO as a Ponzi scheme from its very start, but the DAO still managed to spur an entire “DeFi 2.0” movement – inspiring popular spinoffs like KlimaDAO and WonderlandDAO to jump in with their own high-yield token systems.

As OlympusDAO has grown into one of the most popular projects in decentralized finance, its creators – the pseudonymous “Zeus” and “Apollo” – have remained anonymous (until now, perhaps, in Apollo’s case).

Pseudonymity of a project’s core contributors is not uncommon in the world of DAOs, and it has been framed as a way for a decentralized community to preserve meritocracy.

Liang’s lawsuit suggests there are other reasons why DAO creators might want to hide their identities, and the filing comes a couple of months after the pseudonymous creator of WonderlandDAO, OlympusDAO’s largest spinoff, was unmasked as a well-known convicted felon.

This is a developing story. Check back for updates.

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Sam is a reporter at CoinDesk focused on decentralized technology, DeFi and DAOs. He owns ETH, BTC and MATIC.

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Sam is a reporter at CoinDesk focused on decentralized technology, DeFi and DAOs. He owns ETH, BTC and MATIC.