Olympus x Gauntlet: Strategic Lending, Built to Last

Olympus has launched a new sUSDS lending vault on Morpho. This move isa measured advancement in how Olympus activates its stable reserves. Developed in collaboration with Gauntlet, a leader in on-chain risk curation, the vault enables Olympus to generate sustainable yield while maintaining the integrity and values that define the protocol.

What Is the sUSDS Vault?

The vault enables Olympus to lend its stablecoin, sUSDS, into carefully curated markets. Rather than pursuing unsustainable high-yield opportunities, the vault uses Pendle Principal Tokens (PTs) as collateral. This strategy is designed to deliver predictable returns with low downside risk.

Gauntlet, serving as Curator, collaborates with Olympus to identify acceptable collateral markets. Their role ensures that lending decisions are guided by a thoughtful and consistent risk framework.

Understanding Pendle PTs

Pendle PTs represent a fixed amount of future value, typically $1.00 at a defined maturity date. They are created by splitting a yield-bearing asset into two components:

PTs (Principal Tokens) are redeemable for a fixed amount at maturity. YTs(Yield Tokens), represent the yield earned until that date. Olympus accepts only the PT side as collateral, offering a number of benefits. PTs provide a predictable timeline for value, reduce exposure to volatility, and allow Olympus to lend at a discount while maintaining downside protection.

For instance, the first collateral market in the vault accepts PT Ethena sUSDE 29MAY2025. These tokens will mature into $1.00 on May 29, 2025. Olympus lends $0.75 in sUSDS against each $1 PT, representing a 75% Loan-to-Value ratio. The maturity-backed nature of the PT offers Olympus a clear recovery path in the event of borrower default.

How the Vault Operates

Olympus deposits sUSDS into a Morpho vault, where borrowers can access the capital by posting eligible PTs as collateral. Olympus lends $0.75 sUSDS against each PT, which is valued at $1.00 at maturity. In return, Olympus earns interest on the loans. If a borrower fails to repay, Olympus retains the PT collateral and redeems it for its full $1.00 value at maturity, preserving capital and securing the intended return.

Risk Parameters and Protections

Olympus lends at a Loan-to-Value (LTV) ratio of 75%. This means it lends $0.75 for every $1 of PT value, creating a built-in 25% safety margin.

A second layer of protection is the Loan-to-Liquidation Value (LLTV), set at 91.5%. If the value of a PT drops and the loan reaches 91.5% of the collateral’s value, liquidation is triggered to protect the protocol.

For example, if Olympus lends $0.75 and the PT falls to $0.82, the ratio hits 91.5% and triggers liquidation.

Governance and Roles

This vault is governed through a set of defined roles:

• Olympus DAO’s main-net multi-sig serves as the Owner.
• Gauntlet acts as the Curator, selecting markets based on predefined risk parameters.
• A joint Olympus-Gauntlet multi-sig provides Guardian oversight.
• Gauntlet’s allocation bot and Morpho’s public allocator manage loan distribution.

These roles ensure shared responsibility, risk management, and the long-term integrity of the vault.

Scaling with Intention

Olympus has received governance approval to deploy up to $30 million in sUSDS through this vault. Initial funding will begin with smaller tranches, between $500,000 and $1 million, with collateral markets evolving as PTs mature.

This is a strategic move in pursuit of a larger vision.

Why This Matters

This initiative allows Olympus to generate low-risk yield on idle reserves, enhancing OHM’s liquid backing. All vault logic is on-chain and fully transparent. Most importantly, this strategy was designed with sustainability in mind, with Gauntlet’s collaboration bringing robust risk management to market selection.

Looking Ahead

This vault is more than a deployment of capital. It’s a reflection of Olympus’ long-term approach to treasury design. Built on curated risk, aligned incentives, and on-chain transparency, it represents a key component in a broader effort to strengthen the foundation of Olympus.

With Gauntlet’s risk expertise, Morpho’s lending infrastructure, and Olympus’ strategic intent, this collaboration sets a new standard for how protocol-owned reserves can be deployed effectively, safely, and purposefully.

You can find the Morpho vault here:
https://app.morpho.org/ethereum/vault/0x3365184e87d2Bd75961780454A5810BEc956F0dD/gauntlet-olympus-susds-vault