• General
  • RFC: Cooler Loans Round Two (Electric Boogaloo)

This post is a follow-on to TAP-27, contingent on a “Reject” vote passing. It looks to provide a passable, holistic Cooler loan proposal, with no necessary subordinate amendments. It will describe each step and process for implementation, to be followed verbatim unless and until a future proposal affects changes.

The vote to be conducted is the following:

  • 90% consolidated backing lent per collateral token; 0.5% interest per annum

  • 95% consolidated backing lent per collateral token; 0.5% interest per annum

  • 95% consolidated backing lent per collateral token; 3.3% interest per annum

  • Back to the drawing board

Loan values are referred to relative to “consolidated backing” rather than discrete values. This avoids a repeat of TAP-25, where 95% represented ~3,000 DAI per gOHM at the start of the proposal and ~2,850 at the start of the vote. A discrete loan value would be set following a passing vote and subsequent consolidation of treasury into non-volatile assets (stable coins). I suggest a mix of DAI and LUSD, based primarily on their censorship resistance and the yields they offer today (FRAX is no longer competitive relative to the DSR or stability pool at this time). Should backing per token grow in the future, an amendment proposal could pass raising the loan value; until that point, loan values would remain the same.

Loan tenures are 121 days (four months) at a time. Users should understand that they can roll at any time in advance — you do not need to wait until your loan is near/at expiration to do so. The largest downside of a shorter tenure is an increase in gas expenditure, but benefits to the protocol regarding finality and interest accrual seem to make this worthwhile.

Clearinghouse capacity are handled via rolling top-ups to the facility. At the start of each week (the first day of the week dictated by the first day the clearinghouse is live), the clearinghouse is topped up or drawn down to hold a liquid balance of 18m DAI. If the preceding week saw more loans than repayments, a top-up would occur, adding DAI liquidity for loans. If the preceding week saw more repayments than loans, a draw-down would occur, removing DAI liquidity. Pending technical viability, any balance in excess of 3m DAI held by the clearinghouse at the start of the week will be held in the DSR. Rebalancing of the facility’s liquidity occurs in perpetuity.

RBS will be retuned so that its lower cushion sits at a minimum 2% margin to loan value. This ensures against arbitrage through the clearinghouse facility. This is a minimum because RBS remains dynamic and subject to rise above its floor value.

Regarding the recent Phaeton proposal, we suggest that if it proceeds, it is implemented with a separate token and a conversion of backing upon migration. Users should opt-in rather than having a conversion of all users via majority rule. In this case, Cooler does not interfere; a user moving to the all ETH protocol would repay their OHM loan and migrate. Cooler also removes opportunity cost while that proposal proceeds and protocol is developed, allowing all time needed. We view these two proposals as symbiotic in many regards, though certainly separate.

This proposal has a tentative vote date of Friday, June 30, given forum rules have been met. As with TAP-25 & TAP-27, it will run one week. Should it look likely to pass, author will enter an audit with Sherlock, fronting costs to be reimbursed upon the passage of the proposal.

To summarise the timeline of this proposal:

  • 00:00 Tuesday, June 27 posted

  • 00:00 Saturday, July 1 to snapshot

  • Week of July 3 code into audit

  • 00:00 Saturday, July 8 snapshot concludes

  • Week of July 10 audit concludes + treasury consolidated

  • Week of July 17 code is deployed and clearinghouse is funded

  • Weeks of July 24 onward, clearinghouse is topped-up or drawn-down

Proceed to Vote

    abipup changed the title to RFC: Cooler Loans Round Two (Electric Boogaloo) .

    Cheers. Appreciate the detailed revisions and I'm glad to see several of the voices and recommendations from various members of the community represented in this revised RFC.

    While I'll take some time to cook on this, I just wanted to clarify a couple of points regarding treasury consolidation:

    POL: Would the only POL remaining be OHM/DAI in whatever effective liquidity levels are needed? This could include OHM/DAI, potentially in concentrated liquidity positions if we can find more effective routing in those so long as it's DAI, LUSD or some other acceptable stable exposure.

    ve- Systems: Would treasury exit all ve- positions for stables and would any incentivization for things like BLV just be done through direct HH or Paladin interaction, if at all?

    Strategic Assets: Is there specific guidance on assets where we own a functional amount of supply and will be continuing to receive those assets for the foreseeable future? Also assets where we hold enough supply that spot sells would create large slippage. Should these be treated with a combination of best effort / OTC or is there some other way and time boundary to be considered?

    Illiquid Assets: Recommendations on how these would be treated when they vest and start to distribute?

    Thanks.

      Relwyn

      Again, need to sit back with a clear head to consider some of these points, but around the strategic assets, I strongly favour quarantining these assets outside of the consolidated backing and holding those in alignment with our partners.

      In this bucket I include Klima, Redacted, Jones, Berachain, Vesta (and others of a similar nature I have missed).

      We owe it to our partners, and I still think these links are important to our longer term vision to see OHM succeed as a widespread currency.

      I think CVX and Aura (and assets of a similar nature) sit in a different bucket and this is probably the area for debate.

        WAGMIcapital

        Understood.

        "It will describe each step and process for implementation, to be followed verbatim unless and until a future proposal affects changes."

        This is intentionally precise so I wanted to make the implicit explicit rather than having any more subjective run around. Been enough of that already. Either way, happy to carry out the will of the community once terms are understood and decisions are made.

          Relwyn We are prevented by explicit commitment from disposing of certain assets such as Jones - so proposal must be read down to exclude those assets (afaik this is only Jones but may be others)

          My analysis is as follows:

          Keep because of explicit commitment in the related OIP:

          • Jones ($519K)

          • BOND ($301K) (can sell August 2023)

          Consider keeping because good for relations (were provided to align communities and were not the result of a OHM swap or investment):

          • Klima ($550K)
          • BTRFLY ($850K)

          Locked can't sell:

          • FXS
          • Bera

          Dump:

          • Everything else

            Completing migration will likely materially change the backing figure - this would mean that after 4 months we'd have to come back and agree on a new (presumably higher) Loan Amount.

            Don't think it's worth waiting to do a first deployment of Cooler until that's over, more of a note to everyone considering taking a loan that the first roll may be to a different Clearinghouse.

              abipup doesn't the terming like '95% of consolidated backing' mean this would just adjust up without the need for a further vote

              @Mark11 No, the loan amount is immutable in the contract so whatever is set via governance at the very beginning is permanent for that clearinghouse instance.

              It would be:

              1. Figure out current backing
              2. Take 90% or 95% of that, depending on what's voted on, to compute Loan Value
              3. First round of loans is made with that LV
              4. Migration completes, post-migration backing is known
              5. Take 90% or 95% of that, depending on what's voted on, to compute new Loan Value
              6. Second round of loans is made with updated LV

                abipup this is how I thought about it. Tried to incorporate a scenario like this with:

                nicnombre Should backing per token grow in the future, an amendment proposal could pass raising the loan value; until that point, loan values would remain the same.

                I'm supportive of this proposal and excited to see it move forward to snapshot.

                11 days later

                Mark11 to add to this, we still have 14M USD or so of BTRFLY vesting under the agreement with Redacted; so selling any BTRFLY wouldn't just be questionable ethically (it was 'gifted' at 0 cost), but also bad business as I'm sure this would affect the terms of the agreement with them and our 14M USD vest for the sake of $850k liquid tokens that we'd maybe get 600k USD for?

                Less familiar with the other agreements mentioned, but I think this highlights the need for unique cases to be laid out.

                ETH, CVX, AURA, and anything else that was purchased off our own backs with no commitments or agreements to said teams seems much more straightforward and IMO can be liquidated as treasury management see fit.

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