What is OlympusDAO V2?
OlympusDAO V2 is a new set of contracts for the entire Olympus protocol ecosystem. The upgraded tokens function in the same basic way as before, but facilitate on-chain governance.
The bonding system has also received a massive overhaul. Bonds are now more intuitive and cheaper for users, more efficient for the DAO to administer, and boast other quality of life improvements.
Of particular note, bonds now come in fixed-date expiry and fixed-duration expiry flavors. All bonds can be represented as NFTs, and fixed-date bonds can be represented as ERC20 tokens. Being able to represent the bond as a token is a paradigm shift which unlocks composability for use in other platforms.
The new contracts also address a potential risk to the old system – a lost private key. A core developer purportedly lost access to an admin wallet which could have minted OHM at will if compromised. This issue was first discovered in the Maker governance forum during a proposal review. Yearn core developer Banteg boosted the discovery on Twitter, kicking off a price cascade that took over $1B USD off the OHM market cap.
All funds in the previous ecosystem were safely held in multi-signature wallets, and were not at risk from the lost key. This continues to be the case for Ohm V2, even as the migration continues to on-chain governance.
Implications for the protocol
The new features have two important impacts. First, they allow Olympus to further decentralize. In its current state, core team has a large amount of influence over decisions. The move to full on-chain governance provides the architecture to outlast teams and individuals.
Second, the OlympusDAO V2 contracts massively increase composability with other protocols. An endless list of projects have now forked the Protocol-Owned-Liquidity model, the revolutionary idea at the heart of Olympus. No longer able to rely on their novel model as a moat, the team needs to continue to innovate to keep Olympus at the top of the pile. Composability brings incentive to use existing Olympus infrastructure, versus competing with it.
Impacts to current holders
Everyday users should barely notice the transition aside from migrating. The new tokens retain all the core functions of the V1, with the exception of wsOHM transmuting into the cross-chain portable gOHM (Governance Ohm) token.
However, Ohm V1 holders who are leveraged on platforms like Abracadabra or Fuse need to unwind their levered positions and migrate. Failure to do so exposes them to liquidation risk, as Olympus migrates liquidity from V1 pools to V2 pools. Ohm V1 holders will not miss out on any rebases if they do not migrate immediately, so there is no downside to waiting for optimal gas prices.
Lending platforms and other protocols accepting OHM, sOHM, or wsOHM will only accept the V2 versions in the future. This means users will have to migrate in order to leverage or (9,9) their holdings.
Migration process
Visit Olympus and connect your wallet. Then, you will be prompted to begin the migration process if you have migration-ready assets. All your V1 Ohm assets (OHM, sOHM, wsOHM) will be converted to gOHM. For more details, consult the documentation or the team’s Medium post.
