Olympus Finance is inspired by previous algorithmic stable protocols such as Tomb Finance. Like 2OMB Finance, the protocol uses three tokens (HERMES, ARES, PLUTO) to incentivize a stable 1:1 peg to $FTM.
The mechanism behind the Olympus Finance protocol dynamically adjusts the $HERMES supply, raising or lowering its price relative to the $FTM price. PLUTO (bond tokens) are available for purchase when HERMES falls below the 1 FTM peg.
PLUTO — unique tokens that can help to stabilize the HERMES price around the 1 FTM peg by reducing the HERMES circulating supply if the TWAP (Time Weighted Average Price) drops below the 1 FTM peg.
Each new era of reduction periods, PLUTOs are issued in the amount of 3% of the current turnover of HERMES with a maximum debt of 35%. This means that if the bonds reach 35% of HERMES' circulating supply, the bond issuance is terminated. BONE TWAP (Time Weighted Average Price) is based on the PLUTO TWAP price from the previous epoch as it ends.
You can buy PLUTO, if available, through a bond on Olympus Finance. Anyone can buy as many PLUTOs as they want as long as they have enough HERMES to pay for them. There is a limit (3% of current HERMES circulating supply) of PLUTO available per era during cutback periods and they are sold on a first come, first served basis.