The mechanics of OmenDAO
Learning from Olympus and its predecessors, one principle remains clear: before achieving significant market share, demand for OMEN will primarily be driven by a high APY.
As discussed in the first chapter, sustaining a high APY requires the continuous growth of the treasury. Thus, the ultimate question for OMEN becomes:
How do we grow the treasury?
We've demonstrated that bonding is inherently dilutive and detrimental to holders. However, without bonding, we can't generate the necessary yield to maintain an attractive APY. Investments alone, particularly in the early stages, cannot provide a yield substantial enough to drive OMEN's market share growth. Similarly, liquidity provision offers limited revenue potential.
The ideal solution would involve a mechanism that captures value directly from OMEN's demand while preventing that value from being extracted by third parties. Such a system would ensure sustainable growth for the protocol and better align incentives between participants and the treasury.
What we came up with will change the DeFi landscape:
OmenDAO integrates the concept of taxation with Olympus' treasury distribution model to create a revolutionary token designed for efficient treasury growth. By implementing protocol-level taxes on actions such as buying and selling, Omen redirects these funds to the treasury, generating real yield for stakers.
This approach allows OMEN to fully capture the value generated by the attention it attracts, creating a sustainable flywheel effect: High yield → Increased demand → Higher transaction volume → Treasury growth → Even higher yield → Sustained demand.
Unlike OlympusDAO, where the flywheel effect stalled because increased demand did not translate into more bond purchases, Omen ensures that demand directly contributes to treasury growth through taxation. This results in a far more effective system. At its peak, OlympusDAO achieved a $4 billion market capitalization but struggled with sustainability. Omens addresses this by replacing bonds with taxation revenue, avoiding the price suppression and value extraction by third parties inherent in Olympus' model. This ensures that each token maintains real, intrinsic value and supports long-term growth.
Rethinking success metrics in OmenDAO
Success in OmenDAO is defined by the tangible benefits provided to stakeholders, extending beyond the token's price alone. This strategy ensures that stakeholders consistently receive returns and profits tied to protocol activity and token volume, regardless of price volatility.
In practice, this means that even if the price of OMEN decreases, long-term staking guarantees a level of safety and profitability, shifting the focus from short-term price movements to sustained participation. Over time, stakers may also benefit from potential price increases, but the emphasis remains on creating value through consistent rewards.
This approach encourages a redefinition of success, prioritizing sustainability and stakeholder benefits. To reinforce this perspective, Omen will transparently display the cumulative rewards distributed, offering stakeholders a clear and precise measure of the protocol's success and their participation's value.
Long term goals
Omen' short-term goal is focused on growing its market share and creating value for holders. However, its long-term vision is to evolve into a fully decentralized, treasury-backed protocol. Once OmenDAO achieves a significant market capitalization, the treasury will expand its reach by making strategic investments within the zkSync ecosystem and developing its own suite of products on zkSync.
The ultimate aim is to create a true, auto yield-generating stablecoin on zkSync—a token that generates revenue simply by holding it, similar to what we’ve seen with yield-generating chains like Blast. This approach will allow Omen to offer a stable, sustainable source of passive income for token holders, strengthening both the protocol and its ecosystem in the long run.
OMEN marks the dawn of a new era in DeFi—one that draws lessons from the past while paving the way for a more stable and sustainable future. It distinguishes itself in the DeFi space by prioritizing stakeholder rewards, ensuring sustainable treasury growth, and incorporating innovative self-marketing mechanisms. As the protocol continues to evolve, OMEN seeks to redefine success in decentralized finance, focusing not just on short-term gains, but on long-term value creation and sustainability for all participants.
Last updated