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Decrypting DeFi is Decrypt’s DeFi email newsletter. (art: Grant Kempster)

In a heated Senate hearing on stablecoins this past week, one name came up far more than anyone in crypto would have expected: OlympusDAO and its OHM stablecoin. OHM is a so-called stablecoin that, unlike other stablecoins, is not pegged to a fiat currency. Its price has declined sharply recently, but that hasn’t stopped a slew of DeFi projects from partnering with OlympusDAO because they want to tap its white-label liquidity solution, OlympusPro. 

So, what is it they’re all clamoring for? It’s simple: protocol-owned liquidity. 

A screenshot of the price of OHM
Source: CoinGecko

In a nutshell, DeFi projects have been suffering from mercenary yield farmers. These are often large bag holders who swoop in on essentially any project with a token-incentive scheme going.

Leading DeFi blue-chip project adding token rewards for the next few weeks? They’re there. Small, unknown decentralized exchange on Boba doing something similar? Count the mercenaries in. 

The size of the project doesn’t matter. Just the size of the APY. 

And while this can create a hefty spike in a project’s total value locked (TVL), it rarely lasts. As soon as the rewards scheme ends, these farmers withdraw their liquidity, sell their tokens, and move on in search of the next opportunity. 

Nansen, a blockchain analytics platform, also revealed that “a whopping…


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