Why Gauntlet is leaving Aave after 4 years as ‘risk steward’

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Blockchain ana­lyt­ics com­pa­ny Gaunt­let will ter­mi­nate its work with open-source liq­uid­i­ty pro­to­col Aave.

In a gov­er­nance forum, John Mor­row, the co-founder of Gaunt­let, not­ed that the com­pa­ny was no longer able to con­tin­ue its work with Aave.

“We will be ter­mi­nat­ing our pay­ment stream as soon as pos­si­ble and work­ing with oth­er con­trib­u­tors to find a replace­ment for the risk stew­ard,” Mor­row wrote. 

Gaunt­let was con­tract­ed as a mar­ket risk man­ag­er for Aave. Its team was designed to review mechan­i­cal designs while cre­at­ing long-term eco­nom­ic and busi­ness mod­el­ing sim­u­la­tions for the pro­to­col (in oth­er words, be Aave’s “risk steward”).

Read more: Con­trib­u­tors need to be more account­able to the DAOs they serve

Aave itself is a liq­uid­i­ty pro­to­col that enables users to lend and bor­row cryp­tocur­ren­cies by post­ing col­lat­er­al. Aave v3 is the largest DeFi lend­ing pro­to­col today, with a total val­ue locked (TVL) of $9.5 bil­lion, accord­ing to DeFiLlama.

Mor­row not­ed many things had tak­en a turn over the past four years work­ing with Aave. One exam­ple giv­en was that the team found it dif­fi­cult to nav­i­gate incon­sis­tent guide­lines and undoc­u­ment­ed objec­tives from the largest Aave DAO stakeholders. 

In par­tic­u­lar, Gaunt­let said it faced crit­i­cism from Aave del­e­gates when look­ing for assis­tance in dis­trib­ut­ing ARB emis­sions to Aave users. Aave del­e­gates mean­while gave the oppo­site reac­tion to anoth­er risk stew­ard, Chaos Labs, in response to a pro­pos­al to work with Optimism. 

The team said it received crit­i­cism over alleged­ly “moon­light­ing for direct com­pe­ti­tion” for an eco­nom­ic audit con­duct­ed by its Applied Research team, though sim­i­lar stan­dards were not held when Chaos Labs part­nered with Aave forks. 

In response to Gaunt­let, Marc Zeller, the founder of Aave Chan Ini­tia­tive (ACI), an Aave DAO del­e­gate, told Block­works that the work with Arbi­trum had lit­tle to do with risk, some­thing that Gaunt­let was brought on to do.

“When Chaos had the same kind of engage­ment with Opti­mism, their reac­tion was to dis­cuss and coor­di­nate with the rel­e­vant ser­vice providers and set up a mul­ti­sig with Finance, ACI and them to imple­ment nec­es­sary changes,” Zeller said.

Zeller said Gaunt­let would invoice Arbi­trum for ser­vices direct­ly with­out coor­di­nat­ing with the Aave team, ruin­ing syn­er­gies with third par­ties. Nick Can­non, the vice pres­i­dent of growth at Gaunt­let, replied that the Gaunt­let team knows and speaks to all ser­vice providers regularly. 

“As men­tioned in the forum we con­sult­ed many of them but none could oblige. This is not our core com­pe­ten­cy or a busi­ness line we are look­ing to get into but we’ll do it if it helps our clients,” Can­non said.

Gaunt­let had recent­ly renewed a $1.6 mil­lion con­tract with Aave fol­low­ing a gov­er­nance vote. Its deci­sion to leave this part­ner­ship was met with mixed feel­ings from the Gaunt­let team, Can­non told Blockworks.

“We val­ue the Aave part­ner­ship and are mak­ing some tough trade­offs to vol­un­tar­i­ly leave,” Can­non said.

Read more: How DeFi users are nav­i­gat­ing post-Curve exploit landscape

Zeller, on the oth­er hand, views this behav­ior as “unpro­fes­sion­al.”

“In [tra­di­tion­al finance], leav­ing a $10+ mil­lion client for the past four years with­out notice doesn’t exist and often has con­se­quences,” Zeller said. 

This sen­ti­ment was shared by Stani Kule­chov, Aave founder and CEO of Avara, Aave’s par­ent com­pa­ny, who wrote in a Telegram group mes­sage that Gauntlet’s deci­sion to leave Aave was “expect­ed to happen.”

“The Aave com­mu­ni­ty hasn’t been extreme­ly hap­py with Gaunt­let [from] what I’ve seen, unfor­tu­nate­ly, hence no rea­son to stick around. Also opens room for a new con­trib­u­tor,” Kule­chov wrote in a Telegram group mes­sage reviewed by Blockworks. 

No clear off­board­ing process has yet to be deter­mined, but Can­non notes the team will “ensure a smooth and trans­par­ent tran­si­tion from the risk stew­ard and mul­ti­ple oth­er active workstreams.”

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