If you’re a complete newb starting with fiat (cash money or funds in your regular bank account), this is the guide for you to dip your toes into one of the hottest DeFi projects.
There’s a couple of ways to get invested in Olympus DAO (OHM), but here’s the most straight forward and low cost way to do it.
In this guide we’ll cover the shortcut of buying $gOHM wrapped staked token on the Avalanche network.
Overview to buying and staking OHM
One of the quickest and cheapest ways to invest in Olympus / $OHM is to first on-ramp some of your fiat currency into the $AVAX token (the native token of the Avalanche – also referred to as the AVAX blockchain).
Then, use $AVAX to swap for $gOHM which is the governance token of Olympus. The $gOHM token is a “wrapped” version of the traditional $sOHM token that automatically earns auto-compounding interest rewards.
Here’s the 4 basic steps to buying gOHM:
- Deposit some cash into CoinBase (or your preferred exchange).
- Buy some AVAX tokens.
- Transfer AVAX to your wallet (MetaMask is popular and it’s free).
- Swap AVAX for gOHM on a DEX (decentralized exchange like TraderJoeXYZ).
- Start earning rebase rewards at an insane APY interest rate.
gOHM is already staked, meaning it earns rebasing rewards automatically. As long as you’re holding some gOHM tokens in your wallet, you’re making that cheddar.
Congrats on investing in your financial future. And doing it passively is pretty cool too.
Still confused? Let’s break this down a little further.
To understand why the shortcut of buying staked gOHM is best way to stake in Olympus, let’s take a look at how this is different from buying OHM and staking it on the Ethereum network.
Traditional method: buying and staking OHM on Ethereum
The traditional method of buying and staking OHM happens over the Ethereum network. It involves more steps and you’ll spend considerably more in ETH gas fees.
As soon as OHM branched out onto the AVAX network, and people quickly learned how much you could save on gas fees transacting on the AVAX blockchain instead of Ethereum, many users immediately switched chains.
Moving to AVAX, you could start buying wsOHM (wrapped staked OHM – now being migrating to gOHM with the Olympus V2 end of year rollout).
Before the switch to gOHM, you’d buy OHM from a DEX (not available on CoinBase), then logging onto the Olympus website and using their dApp’s dashboard, you’d stake your OHM in the protocol.
In exchange for OHM, you would be given a receipt token as sOHM (staked OHM) which sits in your wallet.
Keep in mind, this is all done on the Ethereum blockchain and comes with high gas fees for every step of the way. You’ll spend ETH gas for multiple transactions including approval fees, swap and staking transactions fees.
There’s lots of first-time contract approval costs that are unavoidable if it’s your first time staking OHM.
Because ETH gas prices can fluctuate wildly, it’s not uncommon for someone to spend $75-300 to stake OHM on Ethereum.
As an example, if you were investing $1000 at these rates, you could be losing up to 30% of your initial investment.
That’s a lot of money out of your pocket that could instead be used towards earning you larger, compounding interest rewards at a faster rate.
And that can significantly expand your time horizon for achieving early retirement and green lambos.
Learn more about the traditional method of buying and staking OHM in this guide.
The better way to stake OHM
OHM originally started on the Ethereum network.
If you aren’t familiar already, you’ll quickly find out that transacting on the Ethereum blockchain can get very expensive, very quickly.
Blame it on the NFT craze. Blame it on DeFi 2.0 booming
Or just look at the exploding popularity of crypto in general.
When grandma asks you about Dogecoin, you know this crypto thing has massive reach.
Save money buying gOHM on AVAX instead
However, you could make the exact same investment by taking the much cheaper shortcut of transacting on the AVAX chain to buy the already wrapped and staked $gOHM token at the same price.
You’ll spend less than $12 USD in fees to buy gOHM on AVAX while you can expect to spend AT LEAST $50-100 doing the same thing on Ethereum.
There’s not much upside for staking $OHM on the ETH network that I’m aware of.
For other options to buy and stake $OHM, check out this guide written by an Olympus Sherpa.
NOTE – Currently, you can see your calculated amount of sOHM with the Olympus dashboard on the ETH network. The dashboard still needs to be updated to show the wrapped sOHM for AVAX network.
How does gOHM earn you money?
When you hold gOHM tokens in your wallet, they’re constantly earning interest in the form of rebasing-rewards. gOHM is what you would call an interest-bearing token.
The value of each gOHM token goes up in proportion to the current index of the Olympus DAO protocol. As the index automatically increases every day, so does the value of gOHM.
As long as the value of the $OHM token continues healthy growth, so will your $gOHM.
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