FRAX-OHM PARTNERSHIP INTRODUCTION
Frax and ohm are two of my favourite algorithmic stable coins projects that have recently announced a partnership together, to help each other going forward and to furthur develop and build the successes of both project’s ecosystem together.
Frax and Ohm will be providing the initial LP for the FRAX-OHM uniswap pool and OHM will be supporting the usage of FRAX in their treasury, this allows for
- Ohm holders can now swap to frax instead of dai, increasing usage and holders of Frax
- Frax can be used to buy bonds directly from OHM. The Frax which is used here is permenantly locked away into the ohm protocol never to be redeemed (Ohm can potentially be a massive sink for permenant frax usage)
The initial LP token owned by frax should be used to purchase the 1st bond on OHM. Those who are not familiar with OHM by purchasing a bond you give up the LP token to the protocol which is forever locked in return for OHM at a discounted price.
With that OHM you can do whatever you want with it, but I suggest FRAX stakes the OHM and earns APY of 100,000%. Both projects are incentivized to help one another to grow and become a success.
- The yield generated from even a small bond purchase could return astronomical ROI and allow a huge amount of FXS to be burnt from the market similiar to frax AMO
- Increase exposure to frax and more holders as mention in the above paragraph
- OHM is a volatile asset currently and in order to gain access to these high apy a premium is paid on each ohm (which is at its all time low so better risk:reward IMO right now), there is a chance FRAX does not earn yield and comes out with a loss if OHM were to not succeed
Olympusdao is in my opinion an great project that aims to create a floating peg currency combined with a hard working team, great community support and awareness, strong incentivized backing from reputatable VC and continual partnership with well reowned defi projects and growing. Im a hodler of both projects and can see them both do well and mutually benefit greatly from this relationship.