The issue with previous DAOs
A clickbait title to highlight the issues with former DAOs
Former mega-DAOs, such as Olympus, typically offered unsustainable and inflationary native-currency ($OHM) returns to protocol participants, leading to a time-weighted contradiction:
- Purchase $OHM on the market through a DEX
- Purchase $OHM through bonding at a discount to the market rate, conversely giving downside exposure throughout the vesting period (whereby tokens are inaccessible)
This unwanted downside exposure arises through the inability of the underlying protocol to distribute sustainable rewards to participants, instead choosing to mint significant amounts of tokens to reward participants. This led to the perpetual fear of newcomers becoming exit liquidity.