“We're targeting 75% stablecoins and 25% directional exposure,” said an analyst on the Olympus treasury team who goes by the screen name Relwyn. That’s a change from the 79%-21% breakdown comprising Olympus’ $200 million treasury of stablecoins, volatile assets and protocol-owned liquidity.
The tweaking will give Olympus more exposure to ether, which at $8.4 million Friday was already the largest “volatile asset” in the reserve treasury backing OHM. Ether rallied hard this week after the much-anticipated Shapella upgrade failed to trigger the mass sell-off many traders had feared would come from a flood of newly unlocked ETH.
This shift is unlikely to be as “aggressive” on ETH that the framework’s authors said many community members called for. It will, however, result in a decrease in Olympus’ exposure to so-called stablecoins such as DAI that faltered during the March banking crisis.
“Treasury team recognizes the need for Olympus to decrease reliance on stablecoins with centralized backing,” the proposal read. “Increasing ETH exposure marginally is one step in that direction while not undermining the relative stability of OHM’s backing in the near term.”
Relwyn said the treasury operations team “agrees” with community members’ bullishness, but cautioned the protocol can’t just YOLO everything into ETH without incurring a hearty dose of risk. Number may go up right now, but “number can go down, too,” said Relwyn,
Another reason for the measured approach is operational, Relwyn said, noting Olympus’ mechanisms for rebalancing OHM’s backing could get wonky if the treasury’s ether holdings grow too large. Those mechanics currently price OHM in DAI, by far the treasury’s largest crypto holding at nearly $80 million.
“If it priced itself in ETH, it could have more heavy ETH backing,” Relwyn said. “Mixing the two can be dangerous” for how Olympus manages its so-called range-bound stability.
The vote passed with nearly unanimous approval midday Friday. Seventy-six wallets that together held 23,000 OHM tokens participated in the vote.
CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.