Would $AMPL be Positive for the $OHM DAO Treasury?
Olympus DAO uses a protocol-owned reserve of cryptocurrency assets to back the issuance and value of $OHM tokens. It owns this liquidity instead of renting it and holds it in the DAO’s treasury.
As of November 24, 2021, the Olympus DAO treasury holds five crypto assets equating to $805 million USD in value.
The goal for the Olympus DAO treasury, and for any DAO’s treasury for that matter, is to maintain and/or grow in value.
That said, what crypto-asset would best benefit the Olympus DAO’s treasury?
$BTC?… $ETH?…$USDC?…$DAI…$AMPL… or something else?
There really is no easy answer to this question. And that’s because there are so many factors at play.
For instance, DAO treasuries like $OHM’s benefit most from assets that address these five things:
- Value Appreciation — holding/appreciating in value
- Decentralization — resistant to regulatory pressure and central points of control/failure
- Diversification — different from other assets in the treasury to reduce risk
- Uncorrelation — value is driven independent of the market
- Security — time-tested, audited, trusted, secure
Taking these things into consideration, would $AMPL positively benefit the $OHM DAO treasury?
The short answer is yes, $AMPL would be incredibly positive for the $OHM DAO treasury. In fact, it’s better suited to be included in DAO treasuries than most other crypto assets.
In this article, I explain why.
5 Benefits $AMPL Would Bring When Included in the $OHM DAO Treasury (or other DAO Treasuries)
1. $AMPL can Grow Treasuries FAST
$AMPL has the potential to increase the $$ size of DAO treasuries incredibly fast.
Don’t believe me? Take a look at this case study and see for yourself.
$AMPL in Aave’s DAO Treasury
The Aave protocol DAO captures 10% of all the interest borrowers pay and allocates it as a reserve for the Aave ecosystem. In the 4 short months that $AMPL was on Aave, Aave acquired 349,683.48 $AMPL which has grown to become the DAO’s 5th largest treasury asset holding!
And out of those 4 months, there was only 1 month where $AMPL was positively rebasing with $10-$20M of liquidity and still, it managed to become the 5th largest treasury asset. In other words, $AMPL climbed to the #5 treasury asset position in approximately 1 month.
That said, it seems that $AMPL really only needs a small amount of time in the sun to be extremely profitable — even with low liquidity. So, if the $OHM DAO treasury were to adopt $AMPL, it has the potential to grow the treasury’s value incredibly fast.
$AMPL is Low Market Cap — Big Growth Potential
Another reason why $AMPL can grow the treasuries of DAO’s is that $AMPL is still a low market cap crypto asset at $280M. So, there is plenty of room for growth which would be profitable for the $OHM treasury.
And with the $AMPL utility phase kicking off now, there’s plenty of things to kickstart this growth. See the tweet thread below for some catalysts:
Also, if the $OHM DAO and other DAOs incorporate $AMPL into their treasuries, this would positively impact $AMPL’s market cap as less and less $AMPL is available to sell as it’s locked away in treasuries.
2. $AMPL is Secure & Immutable
$AMPL is an immutable, unbreakable, decentralized, and censorship-resistant asset that has been time-tested for +2.5 years. It has been audited and has no back doors as its contract upgradability function has been removed — meaning no one can change $AMPL, disable transfers of $AMPL, or tamper with $AMPL in any way.
These attributes in which $AMPL has are very important for any treasury asset to possess as they significantly reduce the number of security risks.
3. $AMPL is Decentralized = Less Regulatory Risk
One of the biggest risks to crypto-assets is regulatory risk and the only thing that mitigates this risk is decentralization.
Compared to most stablecoins (i.e $USDC, $USDT, and even $DAI), $AMPL has significantly less regulatory risk because it is sufficiently decentralized.
For instance, centralized stablecoins can be outright banned/censored from interacting with dapps or DAO treasuries. Depending on the extent of the regulator’s power, they may be able to freeze funds, terminate accounts, and report accounts to the authorities.
This could be a significant problem for the $OHM DAO as it holds more than half of its treasury in $DAI — a so-called “decentralized” stablecoin that is 60% backed by $USDC. Since $DAI is largely backed by $USDC, it isn’t sufficiently decentralized as it could easily break if regulators target stablecoins like $USDC.
$AMPL, on the other hand, is uncollateralized like Bitcoin. It receives its value from the open market and is far less susceptible to regulatory risk.
4. $AMPL Diversifies Treasuries
A key component to successful crypto-backed DAO treasuries is diversification because the crypto industry is highly volatile and subject to a variety of risks. By including diversified assets in a treasury, some of the risks can be mitigated.
$AMPL can provide the $OHM DAO and others like it with diversification because it is a unique DeFi primitive that behaves differently from most other crypto assets. $AMPL’s rebase mechanism adjusts its supply up or down based on supply and demand; making it a supply/market cap play with its value derived from utility rather than speculation.
$AMPL is more about market cap percentage over daily USD value.
5. $AMPL is an Uncorrelated Asset
$AMPL is the least correlated asset out of the 10 assets depicted in the correlation heat map above.
Because $AMPL’s value is driven independent of the speculative nature of the greater crypto market. Its value is primarily driven by utility via lending/borrowing, derivatives, etc., with some added speculation on the side.
All in all, $AMPL’s uncorrelation is an attractive attribute to have for DAO’s like $OHM’s because it’s part of what makes $AMPL such a great diversifying asset, and again, it helps to mitigate risk.
$AMPL is an asset that should be on the $OHM DAO’s radar, and on any DAO’s radar for that matter. It just has so much to offer and it checks all the boxes.
That said, this question can now be put to rest:
“Would $AMPL be positive for the $OHM DAO treasury?”
We should now be asking:
“Which DAO’s Treasury will add $AMPL next? Will it be $OHM or one of its forks?”
Only time will tell. But it is inevitable!
Whichever DAO adopts it first stands the most to gain — they will have a distinct advantage of taking % slices of the $AMPL supply at a lower mcap (it's only $300m now).
It’s like when El Salvador added bitcoin at a $50k price — the first to adopt stands the most to gain.