A few months ago, I was extremely bullish on OlympusDAO and its forks, and that was what partly made us create this experiment in the IP Address Guide buying and just holding lots of tokens from such projects, simply to see which would perform best over time.
Well, the project has been awesome... with terrible results (if we measure success in USD). You can find all the stats, graphs, and numbers right here. But, seeing the price movements of the protocols in the last two weeks, I am starting to wonder if this is about to mean game over for the so-called rebasing tokens operating with APY between 5000% and 100,000%?
Is this the end for these protocols?
Many protocols are able to keep running for a couple of months with high APY. But, there is one slight problem. The whales spend hundreds of thousands of dollars early on. Then they sell continuously and take profit. After a few months, when the frogs finally reach a level at which they start to sell, the price is starting to drop so much and the giant APY which has given the whales giant rewards for months is no longer worth as much as they were in the first couple of months.
We have seen this with Wonderland (they still operate with a crazy high APY), we have seen it with OlympusDAO, and with all the others. That is why HectorDAO earlier today released a proposal about changing the APY to somewhere between 200% and 1500%. That sounds VERY WISE! Also, they are changing their name to Hector Finance, showing that this is about much more than just being a DAO.
But, when this change will take place, it also means that whales will no longer be able to acquire such giant numbers of tokens and just dump them on the market, and if they do, they will start to drain their own bags (and not just the new tokens generated by the APY). We have seen this done by SpartacusDAO earlier and this has actually managed to stabilize the price. Of course, if there would be some interest in the protocol, I actually believe Spartacus could increase in value. Hector Finance has way greater potential than Spartacus.
-> Check the rebase token results between January 19th and January 26th right here
Bye bye APY of 10,000% and more
It was a nice ride, but it isn't possible to keep it alive without seeing the token price dump. It was fun while it lasted, and we have all learnt a lesson. Now I am curious to see where the ride will take us from here!