January 2023
Summary
Sharing a recap of Gauntlet’s market risk management work with Aave in January 2023. See below for this past month’s work summary and a preview of what’s coming up in February.
Highlights
- Aligned with risk-related service providers and stakeholders on key priorities for the quarter. Setup recurring syncs and shared processes with Chaos and Llama to collaborate more closely on risk-related initiatives, including recommendations on asset listings
- After conducting quantitative research on interest rate curves, provide framework to the Aave community for optimizing interest rate curves. Published recommendations that were approved by the community on-chain
- Updated incident response process - completed setup for internal alerts, escalation, investigation, and monitoring processes
- After conducting quantitative research, published our borrow and supply cap methodology for Aave V3
- Conducted market risk analysis in preparation for Shanghai update
Upcoming Selected Work
- Launching updated Risk Simulation Dashboard
- Publishing Gauntlet holistic risk parameter methodology - guiding principles, overall methodology, etc
- Aligning with stakeholders on communication channels for sensitive market alerts
- Launching v3 Polygon integration into our risk simulation platform
We are happy to answer any questions or hear any feedback - please feel free to comment below.
7 Likes
February 2023
Summary
Sharing a recap of Gauntlet’s market risk management work with Aave in February 2023. See below for this past month’s work summary and a preview of what’s coming up in March.
Highlights
- After months of simulation battle-testing and integration, we have launched risk dashboards for V3 ETH, V3 Polygon, and V3 Arbitrum
- After conducting quantitative research on interest rate curves, extended methodology to cover Aave V3 markets
- After conducting quantitative research, the community has aligned on a risk preference for borrow and supply caps for V3 markets.
- Conducted continued market risk analysis in preparation for Shanghai update
Upcoming Selected Work
- V2 of Risk Simulation Dashboard roll-out
- Aave V3 Migration Analysis
- Continued support of community initiatives and market alerts
We are happy to answer any questions or hear any feedback - feel free to comment below.
4 Likes
Great Job!
Gauntlet has been providing immense value to Aave, and we are excited to see how this value scales to other Aave Initiatives, such as GHO and its accompanying operational aspects.
2 Likes
@Pauljlei hello.
i am not sure we need updates on the forum // why do we keep on posting these?
it leads to bloat, which my mother suffered from.
@Kene_StableLab is your comment productive, or a mere appetite for desirability?
this sort of “update” was made famous by a team desperate for attention.
why purge our home?
we know you’re whereabouts // it is an issue when we don’t.
to my beloved Aave DAO. speak with your actions, not your words.
1 Like
March 2023
Summary
Sharing a recap of Gauntlet’s market risk management work with Aave in March 2023. See below for this past month’s work summary and a preview of what’s coming up in April.
Highlights
-
Firefighting when USDC lost its equivalence to the dollar. Provided risk modeling to inform risk mitigation recommendations and price triggers while communicating closely with Aave Guardian and community. Provided post-mortem analysis to the Aave community.
- After conducting research on Aave V3 dynamics, published V3 E-Mode and V3 Isolation Mode methodology, with weeks of community discussion for protocol alignment.
- Provided risk analysis for GHO launch.
- Implemented interest rate curve optimizations covering all Aave V3 markets. This follows Gauntlet’s interest rate curve changes for Aave V2.
- Continuous market alerts from Gauntlet’s risk monitoring platform
Upcoming Selected Work
- Implement E-Mode recommendations per the community’s preference
- Provide risk analysis on Aave’s cross-chain launches
- Continued support of community initiatives and market alerts
We are happy to answer any questions or hear any feedback - feel free to comment below.
2 Likes
April 2023
Summary
Sharing a recap of Gauntlet’s market risk management work with Aave in April 2023. See below for this past month’s work summary and a preview of what’s coming up.
Highlights
- After months of research and development, published Updated Value at Risk (VaR). The new methodology is more consistent, reliable, and explainable.
- Published LST E-mode methodology and aligned with the community on methodology for Stablecoin E-mode.
- Additional analysis for GHO initial parameterization and path to scale.
- To derisk the protocol, froze assets on Aave V2 AMM market, and aligned with the community to deprecate the market, given the risk/reward tradeoffs.
- Provided analysis and recommendations for Aave’s launch on BNB and zkSync Era. Gauntlet will continue to support Aave’s deployments across chains.
- Launched Aave V2 Risk Dashboard. At this point, Gauntlet has launched risk dashboards for all (undeprecated) Aave markets, other than Metis that just recently launched.
Upcoming Selected Work
- Implement Stablecoin E-Mode recommendations on-chain
- Deprecate V2 AMM market via on-chain proposal
- Implement V2 and V3 Interest Rate Curve changes
- Provide risk analysis on Aave’s cross-chain launches
- Continued support of community initiatives and market alerts
We are happy to answer any questions or hear any feedback - feel free to comment below.
1 Like
May 2023
Summary
Sharing a recap of Gauntlet’s market risk management work with Aave in May 2023. See below for this past month’s work summary and a preview of what’s coming up in June.
Highlights
- After months of research and development, published Synchronicity Price Adapter “Killswitch” Functionality for LST Emode as a potential mechanism to further improve on CSPA 2.0.
- In conjunction with BGD Labs, published research and analysis on important improvement to current pricing mechanisms for LSTs on Aave using the Chainlink Synchronicity Price Adapter (CSPA).
- Additional analysis for GHO initial parameterization and path to scale.
- Executed Aave’s first Risk Steward for increasing wMATIC supply and borrow caps.
- Implemented V2 and V3 Interest Rate Curve Changes.
- Provided analysis and recommendations for adding ARB, SUSHI, RPL, FRAX, fUSDC. Gauntlet will continue to provide analysis for additions of new assets on Aave.
Upcoming Selected Work
- Gather community feedback and proceed forward on Synchronicity Price Adapter “Killswitch” Functionality for LST Emode
- Deprecate V2 AMM Market
- Implement wstETH supply cap increases on Optimism and Arbitrum via Risk Steward
- Provide risk analysis on Aave’s launches across chains
- Continued support of community initiatives and market alerts
We are happy to answer any questions or hear any feedback - feel free to comment below.
June 2023
Summary
Sharing a recap of Gauntlet’s market risk management work with Aave in June 2023. See below for this past month’s work summary and a preview of what’s coming up in July.
| Category |
Work Completed |
Commmentary |
| Quantitative Research |
Proposed 3 options with 4 levers for Synchronicity Price Adapter “Killswitch” Functionality for LST Emode
|
Gathered community feedback and proposed 3 options with 4 levers for Synchronicity Price Adapter “Killswitch” Functionality for LST Emode. |
| Recommendations |
Deprecated Aave V2 AMM
TUSD Offboarding Plan in collaboration with ACI
Lower TUSD LT and LTV on Ethereum V2
Freeze TUSD on Ethereum V2
Increase Supply Cap for rETH on Arbitrum v3, BTC.b on Avalanche v3, and wstETH on Optimism v3
Supply Cap Updates for BAL and LINK on Ethereum V3 and OP on Optimism V3
Risk Parameter Updates for Ethereum V2, V3, and Arbitrum V3
Increase WETH Borrow Cap on Metis V3
Increase Supply Cap for AAVE, LINK on Arbitrum V3 and LINK and DPI on Polygon V3
Recommendations and additional analysis on CRV on Aave V2
Increase wstETH Supply Cap on Optimism V3
|
Daily risk simulations and stress tests |
| Risk Modeling |
Add GMX to Arbitrum V3
Add rETH to Optimism V3
Increase wstETH Supply Cap on Ethereum and Arbitrum V3
Increase WETH and METIS Supply Caps and WETH Borrow Cap on Metis V3
Increase rETH Supply and Borrow Cap
Aave V3 Deployment on BNB Chain
USDT Risk Parameters Update Ethereum V3
Increase WETH Borrow Cap on Arbitrum V3
Add native USDC to Arbitrum V3
Increase sAVAX Supply Cap on Avalanche V3
Increase wstETH Supply Cap on Arbitrum V3
|
Firefighting during unique market stress events. Risk modeling to provide insight into the risk/reward tradeoffs of Aave initiatives |
| Risk Monitoring and Alerting |
Continuous Aave market updates in Telegram Channel, open to the public, for alerts from Gauntlet’s monitoring platform
|
Gauntlet’s risk monitoring platform alerts the community of risk updates |
| Feature Upgrades |
Added Correlated Liquidation Curve Graphs to the Gauntlet Aave Dashboard, which model likely liquidations at various price drops of the collateral asset, taking into account correlated price drops in other collateral assets as part of the simulated market downturn event
Added Local and Global Liquidity Graphs to the Gauntlet Aave Dashboard, which provide more transparency in the liquidity data that informs our recs |
Gauntlet continuously upgrades its product offering |
Highlights
Upcoming Selected Work
- Proceed forward with snapshot for Synchronicity Price Adapter “Killswitch” Functionality for LST Emode
- Provide risk analysis on Aave’s launches across chains
- Continuously monitor and increase supply caps if recommended via the Risk Steward process
- Continued support of community initiatives and market alerts
We are happy to answer any questions or hear any feedback - feel free to comment below.
1 Like
July 2023
Summary
Sharing a recap of Gauntlet’s market risk management work with Aave in July 2023. See below for this past month’s work summary and a preview of what’s coming up in August.
Highlights
| Category |
Work Completed |
Commmentary |
| Quantitative Research |
Option 3 (Lever B) of the Synchronicity Price Adapter “Killswitch” Functionality for LST Emode was approved in snapshot
|
After months of research and development, the approval of Killswitch Functionality for LST Emode shows the community’s collaborative efforts to continuously innovate Aave in risk management. |
| Recommendations |
CRV LTV → 0 on V2 Ethereum
CRV LT, LTV, debt ceiling on V3 Ethereum and CRV LT, LTV on V3 Polygon
Freeze CRV on V2 Ethereum
CRV Deprecation Schedule
TUSD Offboarding Plan in collaboration with ACI
Supply Cap Increase for V3 Avalanche, Arbitrum, Optimism
Risk Parameter Updates for V3 Ethereum, Arbitrum, V2 Ethereum
WMATIC supply cap increase (canceled)
Refreshed recommendations for Aave Base deployment from initial recommendations
Increase USDT supply caps on V3 Ethereum
SUSHI and rETH Borrow and supply cap increase on V3 Ethereum and Polygon
|
Daily risk simulations and stress tests |
| Risk Modeling |
2023-7-30 – CRV market updates and recommendation to cancel AIP 280
2023-8-1 — CRV risk conditions and recommendations to set CRV LTV->0 and freeze CRV
2023-8-4 — Additional analysis and data on CRV liquidity, Aave TVL, withdrawals, migration and RF adjustment
Post Mortem: Curve
Increase WETH and METIS supply cap on V3 Metis
Increase CRV supply caps on V3 Polygon
Increase wstETH supply cap on V3 Ethereum
Increase RPL supply cap on V3 Ethereum
Increase WETH borrow/supply cap and METIS supply cap on V3 Metis
Analysis of Pyth as a secondary oracle solution on V3 Optimism
Increase wstETH supply cap on V3 Arbitrum
Analysis on GHO Stability Module
|
Firefighting during unique market stress events. Risk modeling to provide insight into the risk/reward tradeoffs of Aave initiatives |
| Risk Monitoring and Alerting |
Continuous Aave market updates in Telegram Channel, open to the public, for alerts from Gauntlet’s monitoring platformContinuous Aave market updates in Telegram Channel, open to the public, for alerts from Gauntlet’s monitoring platform
|
Gauntlet’s risk monitoring platform alerts the community of risk updates |
| Feature Upgrades |
Improved data freshness of the Gauntlet platform and alerts system. |
Gauntlet continuously upgrades its product offering |
Upcoming Selected Work
- Implementation of Option 3 (Lever B) of Synchronicity Price Adapter “Killswitch” Functionality for LST Emode
- Recommendations for CRV risk mitigation and deprecation plans
- Provide risk analysis on Aave’s launches across chains
- Continuously monitor and increase supply caps if recommended via the Risk Steward process
- Continue support of community initiatives and market alerts
We are happy to answer any questions or hear any feedback - feel free to comment below.
1 Like
August 2023
Summary
Sharing a recap of Gauntlet’s market risk management work with Aave in August 2023. See below for this past month’s work summary and a preview of what’s coming up in September.
Highlights
| Category |
Work Completed |
Commmentary |
| Quantitative Research |
Kicked off implementation of Lever B of the Synchronicity Price Adapter “Killswitch” Functionality for LST Emode in collaboration with BGD
|
After months of research and development, the approval of Killswitch Functionality for LST Emode shows the community’s collaborative efforts to continuously innovate Aave in risk management. |
| Recommendations |
Freeze CRV on Aave V2 Ethereum
Freeze MAI and set MAI LTV→ 0
Set MAI isolation mode debt ceiling to 0 on V3 Arbitrum, Optimism, Avalanche, and Polygon
rETH and LUSD borrow and supply cap increase on Ethereum and Arbitrum
Interest rate recommendations for WETH and WMATIC on V2 and V3
Recommendation for WETH Uopt on V3 Ethereum
|
Daily risk simulations and stress tests |
| Risk Modeling |
Increase borrow cap for USDT and supply cap for MKR on V3 Ethereum
Parameters for sDAI onboarding
Parameter recommendations for V3 Deployment on Celo
Analysis on automated IR mechanisms
Analysis on wGHO on Aave V3
Recommendations for GHO stability module
Increase borrow cap for LUSD and rETH on V3 Ethereum
Parameters for enabling USDT as collateral on V3 Avalanche
OP risk parameters on V3 Optimism
Increase GHO Borrow Rate
RPL, wstETH, LUSD, LINK, cbETH cap changes
AAVE, METIS, DPI cap changes
Recommendations on WSTETH and STMATIC cap changes
MKR, RPL, UNI and cbETH cap changes
|
Firefighting during unique market stress events. Risk modeling to provide insight into the risk/reward tradeoffs of Aave initiatives |
| Risk Monitoring and Alerting |
Aligned on CRV Deprecation bi-weekly LT reduction plan and posted LT reduction recommendations on 8/21, 9/5, 9/13.
Blameless Post Mortem: Curve
Continuous Aave market updates in Telegram Channel, open to the public, for alerts from Gauntlet’s monitoring platform
|
Gauntlet’s risk monitoring platform alerts the community of risk updates |
| Feature Upgrades |
Added a new feature displaying interest rate curves on the recommendations page of the Gauntlet Aave dashboard, showing the expected impact of the recommendations. Note: these will only appear when a recommendation is live. Example on V3 Ethereum here.
Added filters to all charts on the Gauntlet Aave dashboard, enabling users to select one or multiple assets to be represented in a clean, focused view. |
Gauntlet continuously upgrades its product offering |
Upcoming Selected Work
- Implementation of Lever B of the Synchronicity Price Adapter “Killswitch” Functionality for LST Emode
- Continuous analysis and recommendations for the CRV V2 Ethereum Deprecation Plan
- Provide risk analysis on Aave’s launches across chains
- Continuously monitor and increase supply caps if recommended via the Risk Steward process
- Continue support of community initiatives and market alerts
We are happy to answer any questions or hear any feedback - feel free to comment below.