Gauntlet <> Aave Renewal 2023

Summary

A proposal to renew Gauntlet’s 12-month engagement with Aave on continuous market risk management to maximize capital efficiency while minimizing the risk of insolvency and liquidations to create long-term sustainable growth. For more details, see the full forum post here. The engagement was pre-approved by the Aave community via Snapshot.

Proposal

Since 2021, Gauntlet has been serving the DAO formally. Gauntlet’s Risk Management platform quantifies risk, optimizes risk parameters, runs economic stress tests, and calibrates parameters dynamically. We use agent-based simulation models tuned to actual market data to model tail market events and interactions between different users within DeFi protocols. Our simulations are constructed analogously to how transaction-level backtesting is done in high-frequency and algorithmic trading. Our platform provides similar statistical power in these actuarial analyses by modifying these techniques to handle the idiosyncrasies of cryptocurrencies.

Gauntlet’s features will cover Aave V2, Aave V3, GHO (new), and Insolvency Refund.

The engagement runs from Dec 28, 2023 to Dec 28, 2024. The annual fee will be a fixed fee of $1,600,000. This will be 50% in GHO and 50% in aUSDT.

Full details of the engagement scope, roadmap, expectations, and KPIs are covered in our forum post.

Specification

The Proposal Payload does the following:

• 30% of the total annual fee (480,000 in aUSDT) will be deposited in a vault for the insolvency refund.
• The remaining 320,000 in aUSDT and 800,000 GHO will be streamed linearly over 1 year.

References

• Implementation: AaveV3Ethereum
• Tests: AaveV3Ethereum
• Snapshot
• Discussion

Disclaimer

Gauntlet has not received any compensation from any third-party in exchange for recommending any of the actions contained in this proposal.

Copyright

Copyright and related rights waived via CC0.

By approving this proposal, you agree that any services provided by Gauntlet shall be governed by the terms of service available at gauntlet.network/tos.