[ARFC] Onboard New Risk Service Provider
Vote Result: 1. LlamaRisk, 2. Allez Labs, 3. OpenBlock
Rationale
We have voted YES in favour of the LlamaRisk and Allez Labs TEMP CHECKs and NO against the OpenBlock TEMP CHECK. We will stick to this view, especially given the quality of analysis provided by LlamaRisk and Allez Labs and the relative lack of quality provided by OpenBlock, and only consider LlamaRisk and Allez Labs in our analysis.
The table below outlines our framework for assessment:
| Criteria | Description | Winner | Explanation |
|---|---|---|---|
| Cost | Cost of services | LlamaRisk | LlamaRisk has proposed a cost of $250K while Allez Labs has proposed a cost of 400K GHO. While cost is not a big factor in our decision, we think it should play a role in a comparison. |
| Experience | Level of risk management experience | Equal | LlamaRisk has significant relevant experience with Curve and has assessed a variety of assets (RWAs, LSTs, LRTs). They have assessed LST collateral risk in depth, and have experience in legal regulatory advisory and policy work. They have a battle-tested agent-based simulation model. Allez Labs has great experience in its former Aave team which helped develop Aave’s risk frameworks, showing great intimacy with the Aave protocol. They were involved in the ideation of GHO and created the GSM, proving their deep stablecoin experience. |
| Added Utility to Aave | The added value the risk provider can bring to Aave on top of that already provided by Chaos Labs, judged by scope, credentials, and strength of team | LlamaRisk | LlamaRisk’s legal regulatory and advisory expertise brings a new dimension to Aave’s risk management. Their experience with crvUSD, a stablecoin that is not GHO, may also bring further insight, in our opinion, to how GHO adoption can be increased. Moreover, LlamaRisk’s experience with providing risk reports for RWAs, LSTs, and LRTs will be helpful for Aave going forward, especially as RWAs and LRTs become more prominent. For the former, LlamaRisk’s legal and regulatory expertise may become very relevant. This does not mean that we are discounting Allez Labs’ expertise at all, which is substantial as well. We feel that LlamaRisk has an edge given their expertise can better complement what Chaos Labs already brings to the table. |
| Openness & Transparency | Level of insight into risk models & decision-making | Allez Labs | Allez Labs will democratise access to its risk insights and open source its data pipelines and models. LlamaRisk will provide disclosures and reports on their spending. We think both providers are relatively equal, but Allez Labs’ emphasis on open sourcing its models puts it slightly ahead. |
| Alignment with Chaos Labs | Relationship and working model with Chaos Labs | Equal | It is important for both providers to work hand-in-hand with Chaos Labs. We feel both providers are equal here given Chaos’ comments on both forum posts. |
Given the above analysis, we think the added utility brought by LlamaRisk sets it apart and we will therefore vote in the following order:
- LlamaRisk
- Allez Labs
- OpenBlock