The Magic of the Flywheel

Oh Finance
3 min readMar 28, 2022
The OH! Finance flywheel.

OH! Finance provides industry-leading APY interest rates on your stablecoins on a simple, secure, and easy-to-use DeFi platform on three chains: Moonriver, Avalanche, and Ethereum.

The OH! Finance protocol is designed with a performance-reinforcing mechanism called a flywheel. The flywheel is an essential element in how OH! Finance works, so let’s take a closer look at it.


  • OH! Finance uses a mechanism called a flywheel to generate industry-leading yield, increase TVL, improve the price action of OH, and attract new users in a self-reinforcing cycle.

How the Flywheel Works

Let’s start with you, the user.

📥 Deposit Funds

You deposit 50,000 USDT into the OH! Finance Moonwell vault on Moonriver and receive OH-USDT tokens in return as a receipt that represnts your share of the vault. But what happens next?

First, you start accumulating rewards in-kind (in USDT) at approximately the APY reported on the OH! Finance site. Note that the APYs listed here are annualized. As of this writing, the Moonriver USDT vault is currently earning about 30% APY.

Let’s pause for a second to mention that this is an incredible yield on a single sided stablecoin deposit with no lockup and only light leverage. This is industry-leading APY.

🏦 Total Value Locked Increases

When you deposit your 50,000 USDT another thing happens. The total value locked (TVL), which is a measure of the amount of value deposited into the vault, increases by $50,000. Pretty straightforward.

💰 Protocol Revenue

The OH! Finance autocompounder and optimizer then uses the USDT in the vault to generate yield using various strategies. In the case of this example, the underlying strategy uses Moonwell, a DeFi protocol.

📈 Token Price Action

A portion of the yield (that is, the revenue), currently set at 10%, generated by the OH! Finance protocol is then used to buy back and burn OH tokens, thereby influencing the price action of OH. The protocol completed its first major buyback and burn a few days ago, burning about 500,000 OH tokens. This action permanently removed 0.5% of the entire 100,000,000 OH token supply. Nicely deflationary, eh?

The remaining 90% of the revenue is returned to the vault and used to generate even more yield (or, of course, returned to the user as interest if the user withdraws funds).

👨‍🚀 Users

This deflationary mechanism improves the price action of OH and attracts new users, which increases TVL, which increases protocol revenue, which leads to more buybacks and burns, which influences the token price action, which attracts new users.

Thus, the flywheel.

Oh! Almost forgot to mention. At 30% APY…

  • Year 0: 50,000 USDT
  • Year 1: 65,000 USDT
  • Year 2: 85,400 USDT
  • Year 3: 109,850 USDT.

Many happy returns, indeed.

About OH! Finance

Oh! Finance is an optimized yield-generation protocol, focused on reducing risk and increasing volume exposure. Start earning industry-leading interest rates on stablecoins in just a few clicks:

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