• Proposal
  • TAP-28: Cooler Round 2 (Electric Boogaloo)

This treasury amendment proposal provides a passable, holistic Cooler loan implementation, with no necessary subordinate amendments. It will describe each step and process, to be followed verbatim unless and until a future proposal affects changes.

The only change in this post versus the RFC is an expansion of RBS radius from 7.5% to 10%. This portion is subject to removal if there is backlash, but it seems wise to ensure protocol sell-side liquidity remains at a healthy premium while loans are introduced. The radius can always be reigned back in in the future if this proves overly conservative. The rest of this post is a direct copy.

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. RBS radius is expanded from 7.5% to 10%.

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 snapshot

    I voted yes
    I did have one question, though…
    another audit for a new protocol is not too unreasonable from a business perspective to require.
    Is my understanding correct, if this passes, then you are saying the DAO would reimburse the audit/insurance costs from sherlock? That would be only thing I think maybe we revisit, but I don't think it should hold up proposal, though.
    Thanks!

      Edit: Snapshot start date should be moved to Monday, July 3 (or until proposal criteria are met) to provide adequate time as a TAP.

      PriapusRect that is the intent. what do you think gets revisited there? keep in mind there's no protocol fee that would reimburse the out-of-pocket expense.

        nicnombre
        ok that's a fair point on the lack of protocol fee reimbursing especially if it is an extra expense done solely at the behest of the community, esepcially if cooler is mainly going to be servicing Olympus and not other protocols much. I just didn't want the DAO to subsidize a legitimate business expense (especially if it expanded later to other protocols, cause then it would have been essentially the DAO subsidizing your growth elsewhere)
        thanks for clarifying. eager to see how discussion moves forward with cooler!
        on snapshot start date…will I need to re-vote or will the vote stay?

        nicnombre 00:00 Saturday, July 1 to snapshot

        Given this just came up for the forum vote, this timeline needs to be updated. by at least 3 days.

          nicnombre my preferred combination was the one that was ultimately voted down. What's proposed here is a good compromise though and keeps it democratic with multiple choices. I'm in support of this moving forward.

          RBS price target will need to be closely monitored to make sure that the 2% margin is sufficient. If not it should be moved up to a higher margin. Would be a future proposal but something to keep an eye out for.

          thomasscovell thanks for the context. My perspective is well look back on this and scratch our head how it wasn't so obvious a good thing for the project. Agreed we could have streamlined some of the votes/communication but ultimately I'm ready to see this move forward.

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

          Feels like this vote option should be removed in order to simplify things more as it's too similar to option 2 and thus makes voting more ambiguous.

          11 days later

          Following the approval of this proposal, the Olympus development team has determined that the proposed timeline is unfeasible. Stay watchful on Discord and Twitter for the forthcoming announcement of a more practical timeline. The team will make every effort to implement the items outlined in the proposal to the best of their abilities. Additionally, they will continuously assess the impact these changes may have on the remaining mechanisms of the protocol, aiming to execute the implementation with minimal risk

          After discussing with devs and confirming with @nicnombre , a more realistic timeline is to launch Cooler Loans by end of August. Below, I list a detailed plan of what needs to happen. If we can accelerate some things, we will (e.g. Sherlock audit ends up taking less time). If we discover issues that jeopardize security of the protocol and a delay is needed, we will delay (and this will be communicated ahead of time).

          Smart contract - due by end of July

          • integrate sDAI into Cooler Loans
          • ClearingHouse.sol compatibility with Default Framework
          • Unit and integration testing needed
          • Internal review

          Audit - due by end of August

          • For reference, Olympus’ last Sherlock audit lasted 3/17 thru 4/17 so expect ~1 month from start of audit to completion, including remediations.

          • Note: audit date has still not been set so this may delay launch of Cooler Loans.

          Frontend - due at time of audit completion

          • Development already started

          • QA needed

          • Dashboard updates to properly track gOHM supply and DAI reserves used in Cooler Loans

          • Cooler Loans Dashboard that tracks various metrics. NOTE: This isn't required to launch Cooler Loans, and we will launch Cooler Loans even if development on the dashboard is not yet complete.

            unbanksy33 Thanks for this clarity. Would be great to do a live front end review with the community sooner than later so folks understand how it will ultimately look and function from a UX perspective.

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