TL;DR

• Rebases are gone and growth now comes from a treasury‑first model.

• Cooler Loans turn gOHM into oracle‑free, fixed‑rate collateral.

• Range‑Bound Stability (RBS) can keep OHM trading near backing ±2.5 %.

• Balance sheet: ≈ $200 m reserves, 80 % liquid, earning 4–13 % without reaching for risk.

• Why care? Olympus has matured into a lab for flat‑coins, repo‑style credit and protocol‑controlled liquidity (POL).

What started as a rebase-powered, memefied, coordination experiment during DeFi summer 2021 has slowly matured into a structured and layered financial protocol. This article will explore how the new version of Olympus is focused on treasury management, lending infrastructure, and long-term sustainability.

This is the story of the resurrection.

The Pivot

Part 1 ended with the rebase engine imploding. Today staking converts OHM → gOHM, a non‑rebasing governance wrapper. New OHM now mints only when market price > on‑chain backing per token, shifting the flywheel from emissions‑first to treasury‑first operation.

Slimming down the emissions was only half of the pivot though, the other half is turning a dormant treasury into something with more utility. Olympus did this via Cooler Loans.

Loans Against Backing

Cooler Loans allow users to borrow DAI against the backing of their gOHM.

How it works:

• You deposit gOHM

• Borrow DAI at fixed terms and rate, with no oracles and no liquidations.

• Miss the interest threshold and the protocol simply buys your OHM at backing, burns it, writes off the loan

• Parameters are set via Treasury Asset Proposals (TAPs)

TAP-28
Duration: 121 days (rollable)
Rate: 0.5% APY
LTV: 2892.92 DAI per gOHM ≈ 95 % LTV at launch, ~45 % today (because backing rose)

V2 (audited, shipping soon) will drop the fixed duration entirely. Instead, interest will accrue continuously and once unpaid interest crosses a governance-set threshold (eg 1 year of interest), the same buy-back mechanism will be triggered. It's like a perpetual, volatility agnostic repo desk.

Why does it matter?

It allows the credit demand to self-regulate:

• If market price > backing then effective LTV shrinks

• If market price falls, it allows for more borrowing and Yield Repurchase Facility (more on that later) get cheaper and short circuit the death spiral.

This makes OHM more than a meme. It's now a collateral asset with actual lending infrastructure.

Once credit was unlocked, Olympus needed a mechanism to keep the credit in check. This is where the team brought out their monetary policy tool box.

Central Bank Powers

Olympus has introduced Range-Bound Stability (RBS) which is a mechanism that when deployed, quotes buy walls below and sell walls above a moving-average of market price.

💡 RBS = Central Bank-style intervention
Similar to how the Swiss National Bank kept EUR/CHF in a tight range (2011–2015).
OlympusDAO uses its treasury to:

• Buy OHM when price is below the range

• Sell OHM when price is above the range

As shown in this Dune query 5156506, between February 2023 and December 2024, OHM closed inside RBS’s ±2.5 % cushion on ≈ 80 % of days and breached the outer ±10 % walls only 11 times. Most of the breaches occurred during the week that governance voted to pause the bot for Cooler Loans via OIP-147.

There is also the argument that, right now, volatility is necessary for network growth. Once certain size is reached, RBS can be switched back to stabilise the system.

With all this in mind, active RBS is only as strong as the balance sheets that it aims to defend, so we'll have a look at the treasury next.

Treasury and Yield

As of 20th May 2025, Olympus holds ≈ $217m in its treasury with about 80% of it (≈ $175m) being liquid backing.

One of the core principles of Olympus is to not gamble and lose the treasury but that doesn't mean it has to be idle. Olympus' yield stack includes:

• Sky Savings Rate on ≈ $58m (4.5 % APY) via sUSDS

• With $30m of this being put to work via an Olympus Morpho Vault (13%)

There is also a proposal to introduce carry trading into the yield basket.

All yield flows into the Yield Repurchase Facility (YRF). The YRF auctions DAI for OHM each epoch, burns the OHM, and strips backing into the treasury. This nudges backing-per-token up while float drips down.

With the balance sheet secured, Olympus started looking outward and making bets on where OHM could find its new home.

The Next Modules

In addition to Cooler Loans v2, there are two more modules coming soon:

• Emissions Manager – sell-side issuance only when price > backing, recycling froth into reserves.
• Convertible Deposits – option-style stablecoin inflows whose yield flows to the YRF for constant buy-pressure.

Betting on the Bear

Olympus committed $500k in OHM to Berachain’s seed round for 1 % of Berachain genesis supply and now runs native bridges, treasury and a Kodiak v3 OHM–HONEY CL pool (~$15 m TVL). OIP-176 lets Olympus bribe up to $50k OHM per Beradrome epoch to keep emissions pointed at the OHM–HONEY gauge aiming to make OHM the no‑IL base pair for the chain’s native assets. citeturn2file0

If the thesis plays out, Olympus earns POL plus upside on HONEY emissions. If not, it still controls liquidity and marketing on a fresh L1.

All of which sounds great on paper but the real question is, will the market care?

Will It Work?

As with any financial product; there are risks:

• A sudden clamp-down on the USD stablecoins backing the treasury would freeze ~80 % of reserves and short-circuit every defence.

• A Kernel or policy exploit could mint or drain OHM faster than governance can patch.

• A handful of gOHM whales could tilt emissions rate or drip settings for short-term gain.

• If POL slips below daily trading volume, exits could smash price through backing before buy-backs are effective.

Regardless of how all this plays, Olympus has already set the stage to offer lessons in token economics.

Takeaways for Builders

Olympus has grown from a meme machine to a capital-efficient treasury with switchable monetary policy. It is slowly becoming the central bank that it was envisioned to be.

It's also a live fire lab for:

• Risk/R&D teams studying flat-coins with treasury backing

• Trading desks that require deep, low-volatility base pairs

• Protocol business dev teams looking to bootstrap credit without new tokens

Zooming back out, those lessons fold into the broader narrative of how Olympus is ageing out of its meme phase.

Final Thoughts

Olympus was never “just” a ponzi; it was a coordination hack strapped to a treasury. The hack is smaller, duller and far harder to kill.

Less ponzi, more protocol.

Two degens. One protocol. If they both stake, they win. If one sells, the other bleeds. If both sell? It’s over.

The game is OlympusDAO and it was invented by an anon dev named Zeus in March 2021. It’s a coordination experiment, wrapped in economic theory, disguised as a ponzi and worshipped like a cult.

This is the story of (3,3).

The Grand Vision

At its core, Olympus was trying to fix one of DeFi’s biggest weaknesses: mercenary liquidity.

Most protocols at the time were bleeding incentives. They offered high APYs to attract liquidity providers, only for that capital to flee the second rewards dropped. Liquidity was rented, not owned.

Olympus flipped this with two main innovations:

1. Protocol-Owned Liquidity (POL): Instead of paying users to provide liquidity, Olympus acquired and owned its own liquidity. This gave the protocol control over its trading pairs and price stability, making it less vulnerable to protocol hopping yield farmers.

2. (3,3) Game Theory: A meme-ified strategy to align incentives. If everyone stakes, everyone wins. If someone sells, it hurts the group. The idea was to create a positive-sum game where cooperation paid.

The goal? A decentralised, algorithmic reserve currency backed by a treasury of real assets. OlympusDAO as the central bank of DeFi.

The Magic

Olympus built its economy on three pillars:

• Bonding: Users sold assets (like DAI or LP tokens) to the treasury in exchange for discounted OHM, which vested over 5 days. Olympus used this to accumulate valuable LP tokens and build up its Protocol-Owned Liquidity.

• Staking: Users who staked OHM received rebases, freshly minted OHM distributed proportionally. The more you staked, the more you earned. If everyone staked, the pie grew. If people didn’t stake, their tokens were diluted.

• Rebasing: The supply of OHM expanded regularly, inflating the token supply to reward stakers. It was inflation by design. The thesis was that as long as the treasury kept growing, the inflation was sustainable.

The community turned this into a meme: (3,3). You stake (3), I stake (3), we both win. But if I sell (-3), your staking loses value. It was crypto game theory on steroids.

Treasury grows. Stakers stack. Price goes up. Twitter goes wild.
New believers join the cult and the cycle repeats.

Why Was Olympus So Promising?

• Novel token design with game theory at its core

• Meme marketing of (3,3) went viral

• Strong narrative: “The Decentralised Central Bank”

• The innovation of Protocol-Owned Liquidity

• Cult-esque community of Olympians

The High

At its peak:

• Treasury: $800M+

• OHM Market Cap: $4.3B

• Staking APY: >7,000%

Olympus wasn’t just about printing tokens. It was about belief. It created an identity for participants. (3,3) became one of the first memes tied to a token to dominate crypto Twitter.

Forks exploded. TIME on Avalanche. KLIMA on Polygon. Everyone wanted to be the next Olympus.

| Protocol  | Chain     | Launch  | Status                     |
|-----------|-----------|---------|----------------------------|
| Olympus   | Ethereum  | Mar  '21| Active, now OHM 2.0        |
| TIME      | Avalanche | Sep  '21| Collapsed (Sifu scandal)   |
| KLIMA     | Polygon   | Oct  '21| Active (carbon credits)    |
| HectorDAO | Fantom	| Late '21| Soft rug, liquidity issues |

The Collapse

But belief only holds as long as the price goes up.

• Q4 2021: The Fed hints at interest rate hikes

• Crypto risk appetite faltered, and OHM’s price began to stall.

• OHM emissions outpaced bonding demand

  • As OHM’s price fell, bond discounts became less attractive, who wants to buy discounted OHM when it might be cheaper tomorrow?

  • This discouraged bonding, slowed treasury inflows, and broke the flywheel Olympus relied on.

• Price dropped. Confidence cracked. (3,-3) became the new meme

Reflexivity turned against Olympus in November 2021. People staked because the number went up. When it didn’t, they ran. And since rewards were inflationary, selling caused dilution and further selloffs. A feedback loop in reverse.

TIME (Wonderland)

• Olympus fork on Avalanche, late 2021

• Same (3,3) mechanics

• Key figures: Daniele Sesta and Sifu (aka Michael Patryn, QuadrigaCX co-founder and known fraudster)

• When Sifu’s identity was exposed, trust collapsed and so did the price

Olympus had deeper problems too:

• Its treasury was mostly idle, not yield-generating.

  • That meant it couldn’t reliably offset the dilution from rebases. This accelerated the death spiral once price momentum flipped.

• Rewards were paid out in newly minted OHM with no intrinsic value

• The entire model relied on perpetual inflows to function

The Legacy

Olympus taught DeFi a few hard lessons:

• (3,3) works... until incentives shift

• Protocol-Owned Liquidity is a powerful idea, but needs more than a meme

• Rebases are dangerous if not tied to actual value creation

• Emissions must be justified by real utility or yield

Despite the implosion, Olympus left a mark. It broke the mental model of rented liquidity. It made game theory legible to crypto natives. And it showed how powerful a community can be, until it turns on you.

And somehow, Olympus didn’t die.

It evolved.

Part 2 drops soon. We'll look at Olympus 2.0, the comeback nobody asked for but everyone can learn from.

Trump’s tariff policy is clumsy and corrosive.

William Spaniel breaks it down well: the real damage comes from unpredictability and the erosion of trust. When policies flip overnight and seem half-baked, capital takes note. Trust, once lost, is hard to recover, it’s a bit like toothpaste out the tube. And once investors stop believing in U.S. stability, they stop playing. We’re already seeing signs of capital shifting away from the U.S. rather than piling in like it used to.

Layer on $37 trillion in debt, on and off QE, stretched valuations since 2009, and the U.S. starts to look fragile. The S&P’s dominance wasn’t just built on earnings, it was built on belief. And when that belief cracks, capital allocators start hunting for more stable ground. Charts on flows, yields, and currency moves are already flashing warning signs.

The most worrisome signal in my opinion is the fact that the down move in DXY is accompanied by rising yields.

Standard macro theory would dictate that as yields rise, they are accompanied by a rise in the currency as investors want to earn the higher rate. Falling U.S. indices and DXY in tandem with rising yields are not a great sign.

The Capital Rotation

Capital is flowing out of U.S. Equity Funds.

The clearest capital rotation has been into gold which has been on a tear against SPX since the start of March, reclaiming the previous range and blasting through it.

With the USD slipping, we’re seeing strength in the yen and the euro. Not because those economies are in great shape, but because the U.S. is starting to lose its “safe haven” status. T-bills and the S&P used to be the default store of value. That’s no longer a given. Flows are shifting. Gold is leading, and the FX market is confirming it.

It's not just noise, even politicians are reacting.

Macron saw the range reclaim on EURUSD and said it was time for EUR to replace the USD as the world reserve currency.

Crypto Caught in the Middle

Bitcoin’s often called “digital gold,” but it hasn’t been trading like it. For the past couple of years, it’s moved more like the SPX than a hedge asset. That correlation might be breaking now with BTC showing strength the SPX. Question is: will it finally have its gold moment, or stay confused?

Meanwhile, stablecoins are stuck in the middle. USD-denominated ones dominate the market, but that’s becoming a problem if the dollar loses credibility and there are no real alternatives. This shift could expose some cracks.

One chart doing the rounds on Crypto Twitter and LinkedIn shows a steady drop in active crypto devs. Most see it as a negative, but here’s a different take: this might be a cleanup, not a collapse.

Devs are likely moving to AI. And the grifters? They’re fading. Look at the number of Pumpfun tokens “graduating”. It’s falling fast.

nooman

@n01man

pumpfun is trending to zero at a crazy speed

the graduating token numbers are imploding

last month: 24,008
this month: 11,332
last wee: 2,184
this week: 517
yesterday: 186

the number of tokens been launched daily are also falling off a cliff

similarly the overall pumpfun

3,491

11:34 • 26 Feb 2025

Fewer scam coins, less noise, and a leaner dev scene might mean crypto’s in a healthier spot. If macro conditions turn, it could be ready to run.

What I'm Watching

If capital continues rotating out of USD assets and crypto stays lean; this might be the cleanest setup since the COVID crash 2020. The macro mess could be crypto’s chance to shine.

I trade mostly crypto, so my allocation reflects that. Right now:

• BTC is the core position. It’s acting like a global liquidity barometer. Capital is fleeing soft sovereigns and moving to borderless assets. BTC is leading that move.

• SOL/BTC as crypto risk-on indicator. This used to be ETH/BTC but ETH's dominance has faded and SOL now reacts faster and harder to market sentiment, making it the cleaner signal for when risk appetite returns.

• Alts are rotational plays only short timeframes, momentum-based if animal spirits return to the crypto market with BTC strength. Not holding anything long term.

Specific things I'm tracking:

• BTC/SPX strength to confirm the decoupling and the possible regime shift.

  • Gold/SPX tells the same story, capital fleeing from risk-on U.S. equities into harder stores of value.

• DXY + Yields divergence is still the cleanest macro signal that something’s wrong under the hood. This breakdown in correlation is a red flag. Will be monitoring to see if it persists or whether the gap closes again and things return to "normal".

Also watching stablecoin flow data. If capital starts rotating out of USD stablecoins, that’s a sign the crypto market is truly prepping for a shift in dollar dominance.

Closing Thought

US dominance isn’t over, but it’s cracking. If crypto is going to prove it can stand apart from TradFi, now’s the time.

Remember when DeFi meant ‘farm, dump, and run’?

Yam, Tendies, Pickle, Pizza.

For you, these might just be food items but for me, it’s a reminder of DeFi Summer which also coincided with the Covid summer of 2020. It was a chaotic era full of restrictions and lockdowns but also a glorious era. An era where protocols tempted with 10,000% APYs… and collapsed faster than they launched.

Yet one protocol survived: Curve Finance.

Its secret?

The vote-escrow (ve) model

A tokenomics breakthrough that turned hit-and-run farmers into long-term stakeholders.

Here’s how Curve cured the food farm death spiral… and why its lessons still matter today.

DeFi’s “Farm-and-Dump” Death Spiral

The early DeFi projects were terminally ill.

The diagnosis?

Incentive misalignment.

Protocols like Pickle, Yam and a dozen others offered unsustainable APYs to attract liquidity providers (LPs). The LPs came, sure, but they were not loyal. The capital was mercenary, they farmed the native token, causing the emissions to skyrocket. The tokens were then dumped triggering a death spiral.

The mercenaries moved onto the next protocol like parasite-hopping hosts.

One example that I remember very clearly is Pickle Finance.

Pickle was a yield optimiser where users could deposit assets into Pickle Jars to earn $PICKLE at very high rates. Think Yearn Vaults but with a spicy branding twist and hollow tokenomics. The token had no utility beyond emissions farming.

The emissions were unsustainable, the token had no utility beyond farming, and when a vault hack hit, it was game over. Eventually, Pickle was absorbed by Yearn in a mercy merge.

As a result, we now have graveyards full of fork protocols. They did not innovate and had the exact same issues: high emissions and no incentive to hold the underlying token.

The veToken cure…

Initially, Curve Finance was not immune to the farm-and-dump disease but it certainly developed the best immune system.

All thanks to the veToken antibodies.

Rather than give CRV rewards to all LPs, Curve required locking up CRV tokens in exchange for veCRV which is a non-transferable token that gives voting power and a share of protocol revenue under certain conditions (more on that later).

The formula was simple but powerful:

veCRV = CRV × (Lock Time in Years / 4)

This means that longer locks = more veCRV = more influence and potential rewards.

As a result, LPs had to make a choice between dumping their CRV and hopping to the next host or committing long-term and sharing the protocol’s future.

The evidence speaks for itself. This chart shows that even years after DeFi Summer, users are still locking CRV. That’s not typical farming behaviour but long-term alignment. veTokenomics turned emissions into commitment.

Locking CRV cuts sell pressure and gives governance power, aligning users with the protocol’s future.

veCRV holders vote on gauge weights, directing where future emissions go. This kickstarted a meta-game of sorts where protocols fight for influence over Curve governance known as “Curve Wars”. Convex Finance emerged as the leader in the game.

What is Convex Finance?

Convex is a meta-protocol built on top of Curve.

The goal is to control veCRV without locking CRV yourself.

How Convex Aggregates veCRV:

• Users deposit CRV into Convex.

• Convex locks it as veCRV and earns voting power.

• In return, users get cvxCRV, a liquid token that represents their staked position.

• Convex uses its veCRV voting power to direct emissions and boost rewards for its own LPs.

As a result protocols started bribing CVX holders to vote on their gauges which set off the “Curve Wars”

TLDR: Convex weaponised veCRV by aggregating and centralising the voting power. They boosted the yields but took governance power away from smaller users.

To make the deal for locking your CRV tokens even sweeter, Curve rewards active participants with up to 50% of trading fees (real revenue, not just inflation). The asterisk is that users have to lock their CRV directly via Curve Finance, vote actively, and claim their rewards weekly.

As of writing, 900m of the total 2.3b CRV (or around 40%) is locked in veCRV and effectively removed from the liquid market.

Curve neutralised the emissions rather than slowing them down by tying rewards to time-locked staking. This created protocol loyalty at the token level.

The locking mechanism could also be a way to get around the Howey Test. The rewards are tied to time locked rather than the token itself. Could this be a way to get around the “security” status?

Why Curve’s veTokenomics Worked and Forks Failed

veTokenomics didn’t succeed just because of the lock-up mechanic.

It worked because:

• Curve had utility consisting of deep stablecoin liquidity and constant trading volume.

• It launched in a single-chain, DeFi 1.0 world where liquidity was less fragmented.

• The Curve team fostered an ecosystem around itself: Convex, StakeDAO, Votium.

• The revenue model (50% of fees) gave actual value accrual, not just inflation rewards.

• Forks copied the mechanism but not the context and failed because they had emissions with no purpose.

…and the side effects

While the veToken model helped to solve the farm-and-dump problem, there is no cure without side effects.

Centralisation

The most obvious one is centralisation. Despite being designed to decentralise protocol control by aligning the LPs to long-term contribution, in practice the power is concentrated in the hands of the few. Most notably Convex Finance controls a massive amount of veCRV which is locked on the behalf of others.

This effectively means that a handful of whales and DAO delegates decide where most of the Curve emissions go. A system that was designed to empower the community ended up outsourcing governance to the most capital efficient actors. What if the incentives change and Convex no longer acts in Curve’s interest?

It’s no longer a pure democracy but it’s a meta-game of vote-buying, bribes, and strategic alliances.

If Curve’s gauge votes are mostly driven by bribes, are we really decentralising… or just automating plutocracy?

Voter Apathy

Even among smaller holders who do lock CRV, most don’t vote.

The simple reason is that researching proposals to vote and then claim the rewards is a tedious grind. The yield can be boosted passively through Convex so why bother?

Even though veTokenomics give power to token holders, they do not motivate them to use it. The system still relies on an engaged user base but the incentives push tokenholders towards delegation and passivity.

The veToken model solved the liquidity bleed — but left governance participation an open wound.

Prescription for Builders Today

Whilst it can be argued that the farm-and-dump plague of DeFi summer has been treated, the truth is that the virus has simply mutated.

Today’s symptoms are different but just as deadly:

• Mercenary capital now jumps chains, farming incentives and airdrops with zero loyalty.

• Governance is still broken — either dominated by whales or ignored by the masses.

• Yield remains hollow — often backed by inflation, not real economic activity.

So what’s the real cure?

It definitely won’t be copy-pasting Curve. The veToken model was tailored to a single-chain world of DeFi 1.0.

Modern protocols face a multichain, modular and meta-protocol driven reality. They need to combine stickiness, composability and revenue whilst creating meaningful governance.

Some are already expermienting with rebasing, NFTs, or vote-lock hybrids. Whether these solve governance inertia remains to be seen.

What's Next?

veTokenomics was the first great tokenomic innovation, a breakthrough that turned emissions into alignment.

But the game has changed.

In my next pieces, I’ll explore the rise o (3,3), ve(3,3) and x(3,3) — the next-gen experiments in incentive design that aim to combine liquidity, governance, and sustainability.

Every era has its virus. Every virus needs a cure.

Let’s see if these new models are medicine or just another shot in the dark.

Sources

1. Yearn and Pickle Merger - https://medium.com/iearn/pickle-yearn-ferment-co-operation-dill-eec43b93d0ea

2. Length of Lock and Size of Rewards - https://outlierventures.io/article/vegood-vebad-and-veugly/

3. Dune Queries - https://dune.com/queries/4930233/8158917

4. Dune Dashboard - https://dune.com/throwaway953423356/vecrv-metrics

5. Gauge Weights - https://resources.curve.fi/reward-gauges/gauge-weights/

6. Curve Wars - https://bitsbyblocks.com/overview-of-ve-tokenomics-model/

7. veCRV Centralisation - https://simpleswap.io/blog/vecrv-and-its-impact-on-curve-finance

This article is from a past chapter of my writing, back when I was diving into game mechanics. Since then, I’ve pivoted to tokenomics and DeFi. If that’s more your thing, you might like this one instead: "How Curve’s veToken Model Cured the Food-Farm Death Spiral".

At OPENFORMAT, we spend a lot of time thinking about how our cross-platform rewards and reputation system can be applied to various use cases. This week, we've been focused on ambassador programmes, so we've created this comprehensive guide to illustrate how different game mechanics can be leveraged to maximise their impact.

Our goal is to incentivise and reward quality engagement rather than quantity. By focusing on meaningful interactions, we can prevent noise while fostering trust and long-lasting consistency within the community. Two key areas of focus are setting clear guidelines for expected content and ensuring that the value exchange is directly linked to value-added activities. With clear expectations on both sides, the following mechanics will make the experience valuable, rewarding, and enjoyable for everyone involved.

A critical tip is to make it genuinely meaningful for ambassadors. We've seen too many Discord and Telegram channels where users mindlessly complete tasks in hopes of an airdrop at TGE. This is the exact opposite of what you want. In such cases, both capital and engagement often vanish as soon as rewards are distributed. Not to mention, users frequently have to leave your platform to collect rewards, disrupting their engagement. Instead, we want a system based on fair value exchange from day one—one that gives ambassadors a sense of purpose and ownership, empowering them while celebrating their achievements and growing their reputation and social influence within the community.

The decentralised and transparent beauty of web3 enables OPENFORMAT to make this possible: your ambassador programme can run seamlessly across multiple platforms, like Discord and Telegram, with rewards distributed automatically. Our game mechanic cards simplify the process, helping you identify and implement the techniques that will have the most impact. What's not to love?

Each section of the document will explain the mechanic, the reasoning behind it, and provide crucial UI tips—because the success of the system depends on how well it’s flagged and signalled to the user. Remember, proper implementation is key!

Progression and Levelling

A clear path of advancement is crucial to ambassador motivation and easy implementation is key to preserving community manager time. Ambassadors need to have a clear mission, and they also need to understand how to progress on this mission. Ideally, the reward structure is so clear that ambassadors can come up with various strategies for how to advance through the various tiers.

Points:

• Rewarded for completing tasks.

• Based on the difficulty of the task (eg hosting a live QnA > promo tweet) and the quality.

• Acts as a proxy for the ambassador's reputation within the ecosystem.

• Bonuses for high impact content (eg TikTok that goes viral).

  

Tiers:

• Ambassadors can climb the tier ladder (bronze → silver → gold or trainee → master → leader) as they accumulate points and deliver value to the programme.

• Higher tiers should be tied to higher responsibility as well as exclusive rewards.

UI and Implementation Tips-

• Have a clear visual representation of the user progress. This can either be a literal path like in Duolingo or a simple progress bar that allows the ambassador to see when they will achieve the next tier or reward at a glance.

• Notify the ambassadors when they’ve earned points.

• Study the interactions with the notifications and personalise them. Use data-driven notifications to maximise engagement. Remember to make the notifications exciting.

• Host a dashboard that displays a detailed breakdowns of where points came from and what actions contributed the most. Transparency and easy access to information build trust.

• Use UI and drive the value in the rewards. The tier benefits need to be clear on what is rewarded at each tier and how. Clearly flag and display the areas and content that is exclusive. Make it mysterious and desirable.

  ---

Explore Our Notion Wiki

If you're interested in our research on game mechanics, game economies and how they can be used in a variety of ways, don't forget to check out our knowledge base which hosts all of our Game Mechanics Cards and other content. Visit now!

Consistency

The ambassadors now know how to progress through the system, the value they bring and the value they can expect to receive. Now we should employ some mechanics that nudge the ambassadors to stay active and drive consistency. Luckily for us, web3 innovation allows us to also be consistent and recognise the ambassador's streak across multiple platforms

Streaks -

• Most of us are used to streaks being rewarded for consecutive daily actions (eg Snapchat streak).

• In reality, streaks are much more flexible and can also offer rewards for quality consistency (eg consecutive pieces of content being approved at first review).

• Make sure to scale the rewards with the difficulty of the tasks and length of the streak.

  • A milestone consistency streak on a difficult task should yield a very large, meaningful and public celebration.

Streaks carry with them a number of other potential mechanics that could be used to spice up the system.

• A wager or a stake on how long an ambassador can maintain a streak could be a fun way for the ambassador to get more skin in the game and use it as a temporary driver. Key there being temporary.

• You could also implement streak freezes or revival amulets as a reward for a streak milestone, something to recognise the achievement but also acknowledge that we’re all human and don’t have to be perfect 100% of the time.

Decay -

• The accumulated points decay over time if the ambassador becomes inactive.

• Whilst theoretically simple, this mechanic needs to be balanced very carefully - if the decay is too aggressive, it will be discouraging and lead to drop outs. If the decay is too soft, it will be gamed and obsolete. Good luck.

  

UI and Implementation Tips -

• Again, clear visuals and tracking are key. Display and celebrate long streaks whilst flag and signal bright warnings when ambassadors are approaching decay.

• Any additional mechanics such as streak freezes or decay grace periods need to be communicated openly and clearly.

• Use encouraging notifications to help the ambassadors maintain their streaks and be prepared to set off literal alarm bells to prevent reputation decay.

  ---

Achievements and Recognition

Ambassadors' effort should be actively rewarded on a consistent basis as well as at key milestones. It's like little breadcrumbs of validation on the way to the big cake itself. This is where OPENFORMAT really shines, allowing ambassadors to show off achievements collected across different platforms, while our game mechanic cards help design a reward system that’s worth bragging about.

Meaningful badges -

• Badges should be meaningful and rewarded for key achievements (eg 100k views or hosting 10 events with 100+ attendees).

  • If badges are rewarded at every corner, all of them lose value and stop being effective.

• As long as your badges are tied to meaningful progress within the system, you can use them as access keys as well as rewards (eg Super Hoster badge - hosting 10 events with 100+ attendees - can give access to channels and tasks around major conference planning)

Know how to celebrate -

• A simple "high-five" type reward can be rewarded en masse to celebrate small incremental process

• Coronations should be saved to celebrate standout content with public recognition (eg Content of the Month)

  

UI and Implementation Tips -

• Make the ambassadors trophy cabinet public and clearly visible on their profile.

• Use tooltips to explain the significance of each badge. Attract extra attention to exclusive or access granting badges.

• Feature top content on a dedicated leaderboard or as pinned posts. Celebrate ambassador achievements with banners and custom graphics. Maybe host a monthly rewards night.

Community Voting and Peer Validation

Involve the ambassadors in decision making and content validation to further drive trust and collective ownership. Power to the people.

Tier Voting -

• Higher tier ambassadors should be able to vote on key ambassador preprogramme decisions such as selecting content themes or approving community events.

• This can also be implemented by being able to reward points by reacting with emojis in various channels, with higher ranked ambassadors able to reward more points. Be careful though, this could lead to collusion. You can balance this by putting a cap on how much rewarding an ambassador can reward.

Pier review -

• Contributions should be validated by the community to ensure alignment on the quality.

• Malicious voting can be punished by slashing the peer review rewards.

UI and Implementation Tips -

• Voting interface that clearly shows the active polls, past results and indicates the weight of each vote based on the tier of the voter is crucial for transparency.

  

• Implementing a voting system using emojis or simple upvote/downvote mechanics combined with approval thresholds can automate reward distribution and visually signal the peer approved content.

Collaboration and Engagement

Community spirit is crucial, but maintaining it across a fragmented community can be tricky. If only there were an infrastructure tool to unify your community with a frictionless reward system… Anyway, ambassadors should be encouraged and rewarded for working together. Collaboration needs to be fun and exciting, not daunting or anxiety-inducing. The goal is to foster authentic relationships that radiate throughout the rest of the community

Teams Quests -

• Simple missions that require teamwork (eg content collaborations or co-hosting community events).

• The rewards also need to be meaningful to the whole group, this is particularly important when ambassadors from different tiers are working together.

Reward Delivery -

• A whole guide could be written on various reward delivery mechanisms. The secret here is to keep them varied, fun and somewhat unexpected.

• Bundled rewards are good for completing multiple related tasks or missions. The promise of a big prize at the end can help to motivate longer and more difficult jobs.

• Random rewards can act as little surprises that keep the ambassadors on their toes and potentially exploring the system to see if there are any specific triggers.

UI and Implementation Tips -

• Team Quests require dedicated UI where all members of the team can track contributions and keep each other accountable.

• Team Quests and Bundled Rewards should have clear progress indicator to maintain drive.

• Spin-the-wheel or mystery box mechanics can be used to deliver random rewards. Remember to clearly and transparently communicate the chance of receiving each of the prizes.

Key Takeaways

• Focus on rewarding impactful contributions that add value to the community. Avoid mechanics that incentivise spammy or shallow participation.

• Ensure ambassadors have a transparent path for advancement with a well-structured points and tier system. Use visual tools like progress bars to help them track their growth and understand the benefits of levelling up.

• Use streaks and decay mechanics to keep ambassadors active, but balance these carefully to prevent burnout or exploitation. Offer flexibility, like streak freezes, to accommodate real-life challenges.

• Meaningful badges and public celebrations boost morale and foster a sense of accomplishment. Make sure these rewards are rare and impactful to maintain their value.

• Incorporate community voting and peer validation to engage ambassadors in decision-making. This builds trust and gives them a sense of ownership in the programme’s success.

• Design team quests and collaborative missions that promote teamwork and camaraderie. Reward group success in ways that feel fair and meaningful to all participants.

• The success of these mechanics hinges on how they are presented. Use engaging, data-driven notifications, transparent dashboards, and celebratory visuals to make interactions feel rewarding and intuitive.

This article is from a past chapter of my writing, back when I was diving into game mechanics. Since then, I’ve pivoted to tokenomics and DeFi. If that’s more your thing, you might like this one instead: "How Curve’s veToken Model Cured the Food-Farm Death Spiral".

🧑‍🍳🧑‍🍳Setting Up the Kitchen

For almost a week now, we've been sharing various game mechanic cards in the OPENFORMAT Discord. Let me start by shouting out one of our favourite builders, Chris, who has been giving us some great feedback which inspired this article.

Chris' mention of "recipes" got me thinking about how game mechanics are just like ingredients that come together to make a dish which can either blow the users away or leave them with a bad taste in their mouths.
Let's get cooking!!!

Base Ingredients

At the core of most game mechanic recipes are progression systems and rewards. These form the base, like rice or pasta in a meal. Without a solid base, your dish (or dApp) might lack substance.

In Duolingo, which is my favourite app to pull examples from, learners are on a visual learning journey where as each milestone is reached, users are encouraged by seeing their progress and being rewarded with treasure chests along the way. This creates a strong foundation for user engagement much like a hearty ingredient that fills out a dish.

Spices and Seasonings

Once we have the base sorted, we can add some spices. Streaks, badges and leaderboards are the main flavours in most apps these days. They are like the herbs and seasonings that add an aroma of excitement and variety to the user experience.

Just like there are nuances to how we use herbs in the kitchen, there are nuances to how we use game mechanics in a particular system. Let's look at leaderboards and Duolingo, the global leaderboard (like oregano) adds broad competition, motivating users to compete on a large scale. Meanwhile, the friends-only leaderboard, similar to basil, offers a more familiar, friendly rivalry. Occasionally, Duolingo also uses seasonal leaderboards, like rosemary, to add a time-limited twist, encouraging users to push harder for limited-time rewards.

Presentation and Plating

Creating a perfect digital experience, like a memorable dish, involves more than just a few main ingredients. Here's some other ingredients to add to your next recipe:

• User Interface as Presentation: the taste of the dish can often be amplified by its plating, a clean and well implemented UI can add a spotlight to the game mechanics elevating the user experience.

• Personalisation as Custom Flavour: Personalised features, like avatars or Fortnite skins, are like menu extras that users can add to their dish to make the experience unique to them.

• Social Sharing as Dining with Friends: Social features add a social boost, letting users showcase achievements just like letting your friends try what you've ordered to compare dishes.

• Difficulty Scaling as Spice Levels: Just as a chef tailors the spice level to a guest's preference, adaptable difficulty settings let users find their ideal challenge. Adjustments based on skill level ensure the experience is satisfying, whether users prefer mild or intense gameplay.

Watch Out for Over Seasoned Dishes

Not all recipes are fool proof. Overusing mechanics can lead to user burnout—just like too much salt can ruin a dish. Going back to Duolingo for the last time, the streak feature works well because it's easy to maintain - a single lesson can be shorter than three minutes. This means that even if the learner is busy, they can quickly extend their streak and carry on with their life. Having to complete too many actions to maintain a streak can quickly turn daily engagement into a chore and switch users off.

Similarly, heavy reliance on leaderboards or competition may alienate casual users who aren’t interested in high-stakes rivalry. Striking the right balance is key, ensuring your mix of flavours keeps users engaged without overwhelming their taste buds.

Just as a bakers dozen includes an extra for the baker to taste test, make sure you also taste test and refine the dishes you're looking to serve.

The Final Tasting

With a thoughtfully crafted mix of mechanics, your app can create a satisfying experience that keeps users coming back for seconds. For those like me who are inspired by the flavours of Duolingo, stay tuned for our Duolingo Mechanic Cards Pack, coming soon! Don’t miss out—get ready to cook up something unforgettable!

This article is from a past chapter of my writing, back when I was diving into game mechanics. Since then, I’ve pivoted to tokenomics and DeFi. If that’s more your thing, you might like this one instead: "How Curve’s veToken Model Cured the Food-Farm Death Spiral".

When I think of streaks, my mind wanders back to my high school days, where maintaining a Snapchat streak with my friends was one of the most important parts of my morning.

Jerry Seinfeld's "Don't Break the Chain" method and my primary school attendance rewards were also streaks. Streaks are simply rewards for completing consecutive actions, which makes them an effective mechanism for promoting consistency and habit-forming behaviour.

However, this doesn’t mean streaks are a magical feature that will save all apps and businesses from churn. Just because streaks are great at bringing learners back to Duolingo every day doesn’t mean they will be equally successful in driving engagement in Candy Crush. Below is a breakdown of the nuance behind streaks.

Consistency, Ownership and Loss Aversion

Most successful streak implementations focus on building habits and consistency, which then tap into loss aversion.

Duolingo rewards streaks for completing daily language lessons. As users finish each lesson, they experience a psychological reward by seeing their progress. The streak counter increases from six to seven, and a smile appears on their face. Once a learner achieves a certain streak, they become attached to it and don’t want to lose it, so they keep coming back for their daily lesson.

Apps like Headspace, Habitica, and Strava all rely on users' consistent habits and commitment to improvement. After seeing respectable progress and developing a sense of ownership and pride, users keep returning to avoid losing that progress.

For example, a friend of mine struggled with weight loss for years. He started using MyFitnessPal and built a streak by consistently logging his meals and workouts. That consistency alone was enough to spark his initial progress. Being mindful of his caloric intake and exercise routine led him to optimise his fitness regime, and his progress skyrocketed. Maintaining that streak kept him accountable, and over time, he achieved his fitness goals. Interestingly, he didn’t brag about how much weight he lost or his personal records at the gym. What he was most proud of was the length of his MyFitnessPal streak.

The Potential for Streaks in Web3

Just as streaks have successfully driven engagement in traditional digital media, their benefits can extend to Web3 apps. Possible scenarios where streaks might make sense in Web3 include:

• Tracking and rewarding high-value interactions: In apps where maintaining a streak impacts one’s share of rewards or influence, tracking it on-chain could be beneficial.

• Exclusive membership or content: Apps could reward certain streaks with an access key NFT, proving activity and dedication to a community.

• DAO participation: Voting participation could be tracked as a streak, with longer streaks indicating commitment to the organisation and contributing to reputation.

• Cross-platform streaks: High streaks on one platform could be rewarded in another, promoting cross-app engagement.

However, it’s important to consider potential drawbacks in Web3, such as gas fees and burnout:

• Gas fees: Streaks usually require frequent interactions (e.g., daily), and the costs of these daily transactions can add up, even on Layer 2 solutions. Ensure the rewards for maintaining a streak outweigh the transaction fees users have to pay.

• Burnout: Streak mechanics can put pressure on users to stay engaged, leading to burnout. While this is true of all streaks, blockchain-based streaks are especially vulnerable due to the irreversible nature of blockchain records. If users break their streak, they may settle for what they’ve achieved and drop out altogether.

Streak Nuance

While streaks are highly effective in certain contexts, they may not be suitable for every platform—particularly those that rely on long, infrequent user sessions.

For example, Candy Crush monetises through long, frustration-driven play sessions. Users often play infrequently but for extended periods, and the game profits when users purchase boosters and lives after running out of moves. In this case, streaks based on daily logins wouldn’t be as valuable. The platform profits more from intense, infrequent play rather than short, frequent check-ins.

That said, streaks don’t always have to be tied to daily logins. Performance-based streaks, like Pokémon Go’s “good throw” streaks, show how streak mechanics can adapt to different contexts. For a game like Candy Crush, streaks could reward users for completing levels without taking damage or achieving consecutive wins.

If the pressure of losing a streak isn’t enough, there are ways to raise the stakes. Duolingo’s streak wager system allows users to spend 50 gems to enter a bet: if they maintain their streak for seven days, they receive 100 gems in return.

The loss aversion aspect of streaks can also be further gamified. Users should be allowed to put their streak on hold when life gets in the way. Similarly, just because a user misses a day doesn’t mean they have to lose everything. They could be given the option to buy back their streak or earn it back by achieving a new milestone streak.

Context Matters

The successful implementation of streaks hinges on the context in which they are applied, how they are applied, and the audience to which they are applied.

If you’re considering adding streaks to your app, check out our game mechanics cards to see if another mechanic might better suit your needs.

Key Takeaways

• Streaks foster consistency by turning daily actions into habit-forming behaviours, leveraging loss aversion to keep users engaged.

• The psychological attachment to streaks, like MyFitnessPal’s logging, keeps users accountable and proud of their progress, fuelling ongoing engagement.

• Web3 apps can use streaks to track high-value interactions, reward commitment, and even cross-pollinate engagement across platforms.

• Streaks aren’t a one-size-fits-all solution—apps like Candy Crush might benefit more from performance-based streaks rather than daily check-ins.

• Context is key—streaks need to be nuanced, gamified, and flexible to avoid burnout and fit the platform’s engagement model.