Cooler Loans

The research assessment is adverse because of single-collateral concentration and an 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. Instead, a permissionless keeper function permanently burns a defaulted loan’s collateral. That design avoids liquidation cascades and is a real, verified structural strength. Olympus also clearly discloses its on-chain governance process, a roughly 12-day proposal-to-execution cycle with set quorum and approval thresholds, backed by an emergency veto multisig. 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 collapse caused by unsustainable tokenomics. This creates severe single-asset concentration risk for any position built on the facility. No source identified a formal legal entity behind Olympus DAO or Cooler Loans specifically. The newer V2 (MonoCooler) contract also has no confirmed dedicated third-party audit apart from audits of adjacent contracts.

Review triggers: events that reopen the verdict
• A named legal entity behind Olympus DAO or Cooler Loans specifically is disclosed
• A dedicated, primary-source audit report specifically covering the V2 MonoCooler contract is published
• Additional collateral assets beyond gOHM are approved, reducing single-asset concentration
• gOHM/OHM demonstrates sustained price stability over a full market cycle, reducing the volatility this registry weighs against the collateral quality

Watched nightly: a warning on its venues or files, or a cited document that changes, reopens the memo. The first confirmation is due 2026-11-19.

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 loans with no expiration, borrowing USDS instead of DAI. Its loan-to-value rises through a governance-controlled drip capped at 0.1 USDS per day toward a defined target. DefiLlama’s own tracking method confirms that both versions remain live at the same time. Neither version uses a price oracle for liquidation. After a missed V1 maturity or a V2 interest-shortfall threshold, anyone can call a permissionless default function. It 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 risk of cascading liquidations that this registry has flagged elsewhere in overcollateralized lending markets. But it does not prevent loss for a borrower who fails to service the loan. On default, the protocol burns all posted collateral instead of recovering part of it through a market sale. A defaulting borrower therefore loses 100% of their gOHM regardless of its market value at the time. This failure mode differs from a typical liquidation and is not necessarily gentler.

Governance and control

Olympus governs itself through OCG. The proposal threshold is 0.017% of gOHM supply, quorum is 20%, approval requires 60%, and the total cycle from proposal to execution is roughly 12 days. A `cooler_overseer` multisig can activate, reactivate, or defund the Clearinghouse as an operational kill switch. A separate veto-guardian multisig holds standing emergency veto power outside the normal governance cycle. This control structure has several clearly disclosed layers. The gap concerns the legal entity, not the process: no source this review could access identified an incorporated legal wrapper for Olympus DAO or Cooler Loans specifically.

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, then 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. As a result, every Cooler Loans position depends entirely on one historically and extremely volatile governance token. DefiLlama’s audits field for Cooler Loans reads zero. The broader olympus-v3 GitHub repository shows an active audit history from Spearbit, Code4rena, Sherlock, and others for adjacent contracts, but this review found no dedicated, named audit that specifically covers the V2 MonoCooler contract itself.

Track record and comparison

Tracked TVL has stayed in a roughly $170-216M band over the trailing six months and is currently around $216M. No reported hack or loss event was found in DefiLlama’s hacks tracker or the accessible sources. Aave, Compound, and Sky are all pooled peer-to-peer or peer-to-protocol markets that accept multiple collateral types and use algorithmic rates driven by utilization. By contrast, Cooler Loans uses one collateral asset, has one issuer, and sets a fixed rate by governance vote. This creates a fundamentally different and more concentrated risk profile. gOHM’s own history adds to that risk, and the absence of liquidation cascades does not offset it.

Sources

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

• Olympus DAO — Cooler Loans overview · primary · accessed 2026-08-19
  Supports: V1 versus V2 mechanism differences, perpetual loan and drip-rate design, default definition for V2
• OlympusDAO GitHub — Clearinghouse contract source · primary · accessed 2026-08-19
  Supports: fixed loan terms, permissionless default and collateral-burn function, keeper reward mechanics
• Olympus DAO — governance (OCG) mechanics · primary · accessed 2026-08-19
  Supports: proposal threshold and quorum, cooler_overseer and veto guardian multisig authority
• CoinGecko — Olympus (OHM) price history · secondary · accessed 2026-08-19
  Supports: all-time high and low, current price versus peak drawdown
• DefiLlama — Cooler Loans protocol data · secondary · accessed 2026-08-19
  Supports: TVL history, zero audits field

Inherited controls

The research above describes the protocol layer. Every position also inherits the asset it holds and the chain it settles on. The layer with the most administrative power sets the position’s effective control; that describes control, not quality or suitability.