I have spoken and debated my views extensively in the "General - Policy Discussion" channel on discord, but outline a summary of thoughts here for good order.
Firstly, I think it is important to understand what Cooler is as I see widespread confusion on certain elements. It is a native feature of the protocol which leverages the unique design of Olympus as a backed (not algo or pegged) currency. Cooler facilitates a preservation of the simplicity and low risk nature of the Olympus backing by distributing the risk to holders that wish to access the backing of their OHM to pursue use cases and investments further out the risk spectrum. In doing so, it alleviates the pressure the DAO and treasury face to introduce (further) risk into the backing assets of the treasury. Cooler is furthermore a potent tool alongside the lower RBS cushion / wall to backstop the OHM price at stable backing. In this sense it can operate as a powerful supply sink to remove OHM from circulation when market conditions are depressed (such as now).
This framing is important because it supports my thinking on how the parameters of Cooler should be set.
Capacity: I favour a level that allows access to those who want it, but does not over-allocate to this facility and thereby reduce flexibility for how the treasury is managed. I believe 33m would have been adequate, but 69m was decisively voted for in TAP-25. I therefore think we should close the book on this and settle on 69m as the initial capacity. If the facility is tapped out, then we can expand. If it is under-utilized then we can right-size.
Tenor: The tenor parameter for me is a balance of administrative burden on the user (i.e. frequency at which your facility drawdown must be rolled) versus a trigger point for the protocol to have an updated view on how much supply remains sunk into the facility. I favour less friction on the user, and this again was decisively voted for in TAP-25 as a 12 month preference. Importantly however, to preserve the substance of Cooler, the user must preserve the right to roll this drawdown on the same terms. If not, the attractiveness and utility of the facility is materially diminished because users will not be able to confidently use their backing to invest in longer duration assets.
LTV: I am fundamentally neutral between 2850 and 3000. I think 2850 is adequate to deliver the substance of Cooler, but 3000 would likely assist in reigniting the flywheel.
Interest rate: This is the most important term for the success of Cooler. It should be nominal / 0.5% to remove friction associated with using the facility. This is not a loan to be struck on market based terms or some fancy new income stream for the treasury. It is just a facility to access the backing of each individual's OHM. We want to encourage use of the facility by people who are considering selling their OHM to invest in higher risk assets (i.e. have your cake and eat it too). We want to encourage use of the facility by people that believe in the Olympus roadmap and want to increase their exposure to OHM (i.e. consolidate supply in stronger hands). 3.3% is simply a tax on active users.
Now as it relates to TAP 27.
It is clear from TAP-25 that people want Cooler. So a vote against these combined parameters should be interpreted as a vote against the interplay of the combined parameters. In which case I think we should be coming back to present 4 combined options (all at 69m capacity and 12 month tenor) for final vote and implementation;
- 2850, 0.5%
- 3000, 0.5%
- 2850, 3.3%
- 3000, 3.3%
Regarding 2850 v 3000, it would be helpful to have from the DAO in conjunction with this vote a clear view on what is our backing per gOHM today including a list of assumptions (e.g. stable v volatile), and what actions will need to be taken to facilitate $69m capacity at both 2850 and 3000 LTV.