Is the Overpowered ($OP) coin too good to be true?
Last time I checked my bank account interest rate, it was around 0,001 APY. In the world of crypto, reward based tokens are offering returns that are significantly better returns than traditional money market accounts. In this case, OP is offering 400,977% APY. Yes, you did not read that wrong, it says four-hundred THOUSAND percent!
You might be wondering, how is this possible? Is it sustainable? Let’s take a look.
The $OP team has outlined their milestones throughout 2022, and they have been knocking them out of the park. At the time of this post, they are in Phase 2 — completing their dApp overhaul. So far, they have delivered on their promises. However, targets seem to get vague in Phase 3. And Phase 4 is so far undeveloped. Looking forward at their roadmap, there doesn’t seem to be much ahead.
I did reach out to a member of the team regarding what to look out for in the near future, and it seems a staking system will be released in 2–3 weeks. So that’s something to look forward to, but is it enough?
Let’s take a look at their tokenomics. There are a total of 511,447 tokens in circulation currently, with a buy tax of 12% and a sell tax of 18%. These taxes may seem high at first glance, but they are actually pretty common in the realm of rewards tokens. The higher sell tax discourages selling to redeem profits, which helps maintain a stable price. In the case of selling, a portion of the sales tax goes back into the rewards pool, sustaining the rewards.
According to the stats listed on their dApp, there is currently $180,000 locked in their liquidity pool, and nearly $10,400 in token value in their treasury.
But how is the insane promise of 400,977% APY even possible? It’s quite simple actually. The APY promise isn’t a promise in dollar value, its a promise of coin multiplication. As I said, their current supply is 511,447, but when they launched 19 days ago, they released 325,000 tokens. It has to do with their rebasing system. Look at this snippet of code:
for (uint256 i = 0; i < times; i++) {
_totalSupply = _totalSupply
.mul((10RATE_DECIMALS).add(rebaseRate))
.div(10RATE_DECIMALS);
}
Every time they “rebase” they are increasing the overall supply of tokens to distribute to holders. This is how they fulfill their promise of 400,977%. But we all know the most basic concept of economics: supply & demand. As they continue to release more tokens, the price will continue to plummet.
Some rewards tokens reduce their rewards rate, in order to stabilize unsustainable rewards. In the case of $OP, the rebase function is immutable. That means the payouts cannot be changed and new coins are minted every 15 minutes.
The question everyone needs to answer, as always, “is the risk worth the reward?” That is for you to decide. Do your own research. The rewards are plentiful for now. Only time will tell how long they can sustain the value of their coin. As for myself? I invested…what could go wrong?
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