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Cooler Loans

Rejected
Max sleeve
—
Reviewed
2026-08-19 · v1
Next review
2026-11-19
Research basis
Individual research
Chains
Ethereum · sovereign

Rejected venues wait the longest for re-review; a rejection has to earn another look before the scheduled date.

REJECTED ON SINGLE-COLLATERAL CONCENTRATION AND UNDISCLOSED LEGAL STRUCTURE. Cooler Loans is Olympus DAO’s peer-to-protocol lending facility: a borrower posts gOHM and draws a stablecoin loan directly from the Olympus Treasury at a governance-fixed rate, with no price-based liquidation — a defaulted loan’s collateral is instead permanently burned by a permissionless keeper function. That no-liquidation-cascade design is a real, verified structural strength, and Olympus’s on-chain governance process (a roughly 12-day proposal-to-execution cycle with defined quorum and approval thresholds, backed by an emergency veto multisig) is genuinely disclosed. But the sole collateral asset, gOHM, derives its value from OHM, a token trading roughly 98.7% below its 2021 all-time high after a well-documented unsustainable-tokenomics collapse — a severe single-asset concentration risk for any position built on this facility. No formal legal entity behind Olympus DAO or Cooler Loans specifically was found in any source, and the newer V2 (MonoCooler) contract has no confirmed dedicated third-party audit distinct from the adjacent contracts that do carry one.

The research file

Mechanism

V1 (Clearinghouse) offers fixed 121-day loans at a fixed 0.5% annual rate against gOHM at a hard-coded loan-to-value; V2 (MonoCooler) offers perpetual, no-expiration loans borrowing USDS instead of DAI, with the loan-to-value rising through a governance-controlled drip capped at 0.1 USDS per day toward a defined target. Both versions are confirmed live simultaneously per DefiLlama’s own tracking methodology. There is no price-oracle liquidation in either version: on a missed V1 maturity or a V2 interest-shortfall threshold, anyone can call a permissionless default function that unstakes and burns the posted gOHM collateral, permanently removing it from circulation, and pays the caller a small keeper reward.

What this design does and does not solve

Removing price-based liquidation eliminates the classic cascading-liquidation risk this registry has flagged elsewhere in overcollateralized lending markets. But it does not eliminate loss for a borrower who fails to service the loan: on default, the full posted collateral is burned rather than partially recovered through a market sale, meaning a defaulting borrower loses 100% of their gOHM regardless of its market value at the time — a structurally different, not necessarily gentler, failure mode than a typical liquidation.

Governance and control

Olympus governs itself through OCG: proposal threshold 0.017% of gOHM supply, 20% quorum, 60% approval, a roughly 12-day total cycle from proposal to execution. A `cooler_overseer` multisig can activate, reactivate, or defund the Clearinghouse as an operational kill switch, and a separate veto-guardian multisig holds standing emergency veto power outside the normal governance cycle. This is a genuinely disclosed, multilayered control structure — the gap here is not process transparency but legal-entity transparency: no incorporated legal wrapper for Olympus DAO or Cooler Loans specifically was found in any source this review could access.

Collateral concentration and audit coverage

gOHM is the sole eligible collateral asset. OHM traded at an all-time high of $1,415.26 in April 2021 during the protocol’s (3,3) staking-rewards hype cycle and fell to an all-time low of $7.54 in November 2022; it trades around $18.52 at this review, roughly 98.7% below its peak. That collapse is well-established public history tied to the protocol’s original reflexive tokenomics design, and it means any Cooler Loans position is entirely dependent on a single, historically extremely volatile governance token. DefiLlama’s audits field for Cooler Loans reads zero, though the broader olympus-v3 GitHub repository shows an active audit history (Spearbit, Code4rena, Sherlock, and others) for adjacent contracts; no dedicated, named audit specifically covering the V2 MonoCooler contract itself was located.

Track record and comparison

Tracked TVL has held in a roughly $170-216M band over the trailing six months, currently around $216M, with no reported hack or loss event found in DefiLlama’s hacks tracker or accessible sources. Against Aave, Compound, and Sky, all pooled peer-to-peer or peer-to-protocol markets accepting multiple collateral types with algorithmic, utilization-driven rates, Cooler Loans is single-collateral, single-issuer, and fixed-rate by governance vote — a fundamentally different and more concentrated risk profile, compounded by gOHM’s own history rather than mitigated by the absence of liquidation cascades.

Sources

The claims above trace to these. Where a number could not be independently verified, the thesis says so.

Inherited controls

The verdict above grades the protocol layer. Every position also inherits the asset it holds and the chain it settles on. The least safe layer sets the position’s grade, and the position table names which one that is.

ChainVerdictGradeControl constraint
EthereumApproved sovereign No sequencer, no upgrade key, no operator who can be compelled — rule changes require social consensus.
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