Gauntlet Monthly Updates

[Pauljlei]

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.

Category	Work Completed	Commmentary
Quantitative Research	Interest rate curve framework for the Aave protocol Published Borrow and Supply cap methodology for Aave V3	Over the last several months, Gauntlet has conducted quantitative research on optimizing interest rate curves and setting borrow/supply caps
Recommendations	2 sets of Aave V2 ETH Recommendations Avalanche and Optimism Recommendations Optimism Cap Additions	Daily risk simulations and stress tests
Risk Modeling	Risk Analyses on Shanghai Upgrade cbETH Listing Analysis on V3 ETH rETH Listing Analysis on V3 ETH Analysis on Llama CRV Interest Rate Upgrades wstETH Listing Analysis on V3 OP jEUR Incident Analysis	Risk modeling to provide insight into the risk/reward tradeoffs of Aave initiatives
Risk Monitoring and Alerting	GUSD Utilization Whale Liquidation Position Near Liquidation	Gauntlet’s risk monitoring platform alerts the community of risk updates
Other	IR Curve Corrections on wETH IR Curves Community Bug Bounty	Community and contributor support

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.

[Pauljlei]

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.

Category	Work Completed	Commmentary
Quantitative Research	Gauntlet risk dashboard launch for V3 ETH, V3 Polygon, and V3 Arbitrum Interest Rate Curve research for all Aave V3 Markets	After months of simulation battle-testing and integration, we have launched risk dashboards for V3 ETH, V3 Polygon, and V3 Arbitrum Over the last several months, Gauntlet has conducted quantitative research on optimizing interest rate curves and setting borrow/supply caps
Recommendations	2 sets of Aave V2 ETH Recommendations Avalanche and Optimism borrow cap recommendations, following Snapshot Vote 2 sets of Aave V3 OP and V3 Avalanche Recommendations Polygon V3 Recommendations	Daily risk simulations and stress tests
Risk Modeling	Update on Shanghai Upgrade Market Risk implications to Aave CRV Interest Rate Curve Analysis stMatic Supply Cap Update wMatic Supply Cap Analysis cbETH Supply Cap Analysis Detailed Analysis on sfrxETH Asset Listing WAVAX Interest Rate Curve Analysis CRV Asset Listing on V3 ETH Analysis Recommendation on BUSD MaticX V3 Polygon Risk Analysis LUSD Asset Listing on V3 ETH Analysis USDT Listing on V3 ETH Analysis MAI Borrow Cap Analysis on V3 Polygon	Risk modeling to provide insight into the risk/reward tradeoffs of Aave initiatives
Risk Monitoring and Alerting	Supply concentration alerts Whale Supply Position Position Near Liquidation Position Liquidation WETH Borrow Position BAL Supply Cap Usage Borrow and Supply Cap Usage on V3 Polygon and V3 Arbitrum	Gauntlet’s risk monitoring platform alerts the community of risk updates

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.

[Kene_StableLab]

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.

[thewatcher]

@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.

carefully, watching.

[Pauljlei]

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.

Category	Work Completed	Commmentary
Quantitative Research	Gauntlet E-Mode methodology for Aave V3 Gauntlet Isolation Mode methodology for Aave V3 Initial analysis on GHO launch parameters	Published methodology and community votes to help define the protocol’s approach for E-Mode and Isolation Mode Support GHO launch with initial analysis and recommendations
Recommendations	Risk recommendations to recalibrate all Aave markets following changed market conditions after the USDC volatility LSD cap updates on V3 ETH V3 Arbitrum updates	Daily risk simulations and stress tests
Risk Modeling	USDC volatility firefighting, including risk modeling, risk recommendation triggers, continuous monitoring, and post-mortem analysis Implement interest rate curve optimizations covering all V3 markets Freeze markets on Aave V2 AMM market as a result of low liquidity and usage Provide risk analysis for potential Aave launch on Celo Aave community plan for V2 → V3 migration BUSD offloading risk analysis Provide risk analysis for potential Aave launch on Metis GMX asset listing on Aave V3 Arbitrum risk analysis MaticX on Polygon V3 risk analysis BAL IR curve update analysis stMatic analysis cbETH on V3 ETH analysis GHST on Polygon V3 analysis agEUR on Aave V3 risk analysis	Firefighting during unique market stress events. Risk modeling to provide insight into the risk/reward tradeoffs of Aave initiatives
Risk Monitoring and Alerting	Launched Aave market alerts Telegram Channel, open to the public, for alert updates from Gauntlet’s monitoring platform BTC.b supply MaticX and stMatic cap updates Position Liquidation on Aave V2 Position near liquidation stETH liquidation EURS utilization SUSHI cap usage stMatic cap usage Arbitrum V3 liquidation wstETH cap usage wAVAX cap usage	Gauntlet’s risk monitoring platform alerts the community of risk updates

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.

[Gauntlet]

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.

Category	Work Completed	Commmentary
Quantitative Research	Updated Value at Risk (VaR) Methodology from Gauntlet Additional research and recommendations on GHO launch parameters Aligned with community on Aave V3 Stablecoin E-mode methodology Conducted research and provide methodology for Aave V3 LST E-Mode methodology Implement Aave Isolation Mode recommendations following Gauntlet’s methodology	Published updated, improved Value at Risk methodology after months of research and development Provided methodology for LST E-Mode and Stablecoin E-Mode Continuous support for GHO launch with additional analysis and recommendations
Recommendations	Freeze G-UNI DAI/USDC and G-UNI USDC/USDT in Aave V2 AMM Market Deprecate Aave V2 AMM Market Aave V2 Interest Rate Curve Recommendations Implement V3 AVAX and V3 ETH parameter changes following changed market conditions after USDC non-parity V3 Polygon and V3 Arbitrum parameter updates EURS Cap Update Implement V3 Arbitrum updates V3 Interest Rate Curve recommendations Implement wstETH on V3 Arbitrum updates	Daily risk simulations and stress tests
Risk Modeling	Risk analysis and recommendations for Aave launch on BNB Risk analysis and recommendations for Aave launch on zkSync Era Add support for wstETH on Polygon V3 stMatic Supply Cap on Polygon V3 MaticX Supply Cap on Polygon V3 Safety Module wMatic Supply Cap BAL Borrow Cap Enable USDT as collateral on V3 AVAX Discussion to initiate ETH Correlated E-Mode on Optimism	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	Launched Aave Avalanche V2 on Gauntlet’s Risk Dashboard	Gauntlet continuously upgrades its product offering

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.

[Gauntlet]

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.

Category	Work Completed	Commmentary
Quantitative Research	Conducted research and proposed further improvements to CSPA2.0 with Synchronicity Price Adapter “Killswitch” Functionality for LST Emode Conducted research with BGD on LST Oracle risk and Chainlink Synchronicity Price Adapter 2.0 V3 LST E-Mode recommendations implemented on-chain	Published Synchronicity Price Adapter “Killswitch” Functionality for LST Emode after months of research and development In-depth analysis on LST Oracle risk and additional solution design Continuous support for GHO launch with additional analysis and recommendations
Recommendations	V2 and V3 Interest Rate Curve changes implemented Deprecate Aave V2 AMM Market AIP Live Initiate ETH Correlated E-mode on Optimism Optimism Bedrock Update Increased LUSD Borrow Cap Recommendations for BAL and EURS in Polygon V3 and Arbitrum V3 implemented Risk Parameter Updates for Arbitrum V3 Risk Parameter Updates for Avalanche V3	Daily risk simulations and stress tests
Risk Modeling	Aave V3 Deployment on Base Increase supply caps for LSTs on Aave V3 Add fUSDC to Ethereum V3 Polygon v3 Supply Cap Update Optimism V3 Supply Cap Update Implemented wMATIC Supply & Borrow Cap Increase Polygon V3 Add rETH to Arbitrum V3 Liquidity Pool Increase stMATIC SupplyCap Add ARB to Arbitrum V3 Add SUSHI to Aave V3 Add RPL to Ethereum V3 Add FRAX Arbitrum V3 Freeze MAI from Optimism and 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	Launched Aave Metis V3 on Gauntlet’s Risk Dashboard Addition of Cap Usage Graphs for borrow and supply caps where applicable (example) Risk Dashboard usability improvements, including full screen graphs, direct links to graphs	Gauntlet continuously upgrades its product offering

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.

[Gauntlet]

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

• After gathering community feedback, proposed 3 options with 4 levers for the Synchronicity Price Adapter “Killswitch” Functionality for LST Emode.
• Collaborated with ACI to put forward an offboarding plan for TUSD on Aave V2 Ethereum to gauge community preference and thoughts around further TUSD deprecation.
• Deprecated Aave V2 AMM.
• Provided analysis and recommendations for adding GMX, rETH, and Arbitrum native USDC. Gauntlet will continue to provide analysis for additions of new assets on Aave.

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.

[Gauntlet]

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

• Option 3 (Lever B) of the Synchronicity Price Adapter “Killswitch” Functionality for LST Emode was approved in snapshot as a mechanism to further improve on CSPA 2.0.
• AIP 285 TUSD and offboarding plan in collaboration with ACI was executed.
• Risk monitoring, analysis, and recommendations for CRV: AIP-286 set CRV LTV → 0, AIP-288 reduce CRV LT/LTV on V3 Ethereum and Polygon, freeze CRV on V2 Ethereum, CRV Deprecation Schedule, additional analysis, CRV post mortem.
• Provided analysis and recommendations for deployment on Base. Gauntlet will continue to provide analysis for additions of new assets and deployments for Aave.

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.

[Gauntlet]

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

• Kicked off implementation of Lever B of the Synchronicity Price Adapter “Killswitch” Functionality for LST Emode in collaboration with BGD.
• Freeze CRV on Aave V2 Ethereum was executed.
• Freeze MAI and set MAI LTV→ 0 was executed.
• Published AIP to set MAI isolation mode debt ceiling to 0 on V3 Arbitrum, Optimism, Avalanche, and Polygon.
• Provided analysis and recommendations for deployment on Celo. Gauntlet will continue to provide analysis for additions of new assets and deployments for Aave.

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.

[Gauntlet]

September 2023

Summary

Sharing a recap of Gauntlet’s market risk management work with Aave in September 2023. See below for this past month’s work summary and a preview of what’s coming up in October.

Highlights

• Implementation in progress for Lever B of the Synchronicity Price Adapter “Killswitch” Functionality for LST Emode in collaboration with BGD
• Interest Rate Recommendations for WETH (slope 1 and base rate) have been executed
• Recommendations to lower stMATIC, MaticX non-emode LT have been executed
• Aligned on Aave V2 Markets Deprecation Plan and executed V2 Ethereum Deprecation 10.03.2023
• Provided initial parameter recommendations for V3 on GnosisChain, V3 on zkEVM, KNC on Ethereum V3, FXS on Ethereum V3, STG on Ethereum V3, sDAI on Gnosis Pool V3

Category	Work Completed	Commmentary
Quantitative Research	Implementation in progress for 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	Lower stMATIC, MaticX non-emode LT Aave V2 Markets Deprecation Plan V2 Ethereum Deprecation 10.03.2023 Interest Rate Recommendations for WETH (slope 1 and base rate) Borrow and supply cap recommendations on Metis, Arbitrum, Optimism, Ethereum v3 Arbitrum USDC Migration MAI/MIMATIC Deprecation Slope 1 and UOpt recommendations for WETH on V3 Ethereum Increase borrow and supply caps for WSTETH and BAL on V3 Ethereum	Daily risk simulations and stress tests
Risk Modeling	Increase supply caps for LINK on Optimism, LUSD on Arbitrum, METIS on Metis Increase debt ceiling for MKR Initial parameter recommendations for STG on Ethereum V3 TUSD Offboarding Plan Part II parameter recommendations Initial risk analysis and parameter recommendations for V3 on GnosisChain Initial parameter recommendations for V3 zkEVM L2 Initial parameter recommendations for KNC on Ethereum V3 Initial parameter recommendations for FXS on Ethereum V3 Increase supply cap for LUSD and supply and borrow cap for USDT Increase supply and borrow caps on V3 Metis, Arbitrum Recommendations on GHO borrow rate Increase RPL and METIS borrow caps on V3 Metis, Ethereum Initial parameter recommendations for sDAI on Gnosis Pool V3	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 Aave V2 Markets Deprecation Plan and executed V2 Ethereum Deprecation 10.03.2023 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	Launched Aave V3 Base dashboard	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 Aave V2 Markets 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.

[Pauljlei]

October 2023

Summary

Sharing a recap of Gauntlet’s market risk management work with Aave in October 2023. See below for this past month’s work summary and a preview of what’s coming up in November.

Highlights

• Published research and analysis on GHO Stability and Peg Community Plan
• Risk monitoring and firefighting for the 04/11/2023 security incident, provided Aave v2/v3 security incident risk analysis and parameter recommendations on the Grace Sentinel
• Provided initial parameter recommendations for CRVUSD, stEUR, WOO, wstETH, and Optimism Native USDC across V3 markets
• Launched an Updated Account Explorer feature on the Gauntlet Aave Dashboard
• Implementation in progress for Lever B of the Synchronicity Price Adapter “Killswitch” Functionality for LST Emode in collaboration with BGD

Category	Work Completed	Commmentary
Quantitative Research	Research and analysis on GHO Stability and Peg Community Plan Implementation in progress for Lever B of the Synchronicity Price Adapter “Killswitch” Functionality for LST Emode in collaboration with BGD	With extensive research and analysis on stablecoin peg, Gauntlet hopes to help formalize the community discussion around strengthening the GHO peg and organize it into its core components with actionable items with the GHO stability plan. 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	WSTETH and BAL borrow and supply cap recommendations on V3 Ethereum Increase Uopt for stablecoins on all V3 markets and RF on V2 Ethereum Lower stMATIC, MaticX non-emode LT on Polygon v3 pt 2 Supply and borrow caps for agEUR and jEUR on V3 Polygon Increase cbETH supply cap on V3 Base Re-enable CRV borrowing on V3 Ethereum/Polygon WETH interest rate recommendations on V3 Ethereum executed	Daily risk simulations and stress tests
Risk Modeling	CRVUSD onboarding parameter recommendations on V3 Ethereum stEUR onboarding parameter recommendations on V3 Ethereum Increase stablecoin optimal borrow rates across V2 and V3 GHO borrow rate recommendations MKR, RPL, rETH, WAVAX, METIS caps recommendations across V3 markets Lower WMATIC slope 1 on V3 Polygon Increase rETH borrow caps on V3 Ethereum WOO onboarding parameter recommendations on V3 Arbitrum wstETH and rETH supply and borrow cap recommendations on V3 Arbitrum Supply and borrow caps recommendations on V3 Gnosis wstETH onboarding parameter recommendations on V3 Base Native USDC onboarding parameter recommendations on V3 Optimism	Firefighting during unique market stress events. Risk modeling to provide insight into the risk/reward tradeoffs of Aave initiatives
Risk Monitoring and Alerting	Risk monitoring and firefighting for the 04/11/2023 security incident, provided Aave v2/v3 security incident risk analysis and parameter recommendations on the Grace Sentinel Following the Aave V2 Markets Deprecation Plan and executed V2 Ethereum LT Reductions 10.27.2023 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	Launched an Updated Account Explorer feature on the Gauntlet Aave Dashboard to surface account level data for all markets on our dashboard. The feature includes visualizations and a table with key datapoints about the accounts. Interactive filters and a search bar allow anyone to do their own analysis of positions on the protocol.	Gauntlet continuously upgrades its product offering

Upcoming Selected Work

• AIPs for MAI/MIMATIC Deprecation, stMatic/MatcX non-emode LT reduction, Stablecoin interest rate recommendations
• Continuous analysis and recommendations for the Aave V2 Markets Deprecation Plan
• Implement Lever B of 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
• Continue support of community initiatives and market alerts

We are happy to answer any questions or hear any feedback - feel free to comment below.

[Gauntlet]

November 2023

Summary

Sharing a recap of Gauntlet’s market risk management work with Aave in November 2023. See below for this past month’s work summary and a preview of what’s coming up in December.

Highlights

• Continuous community discussion on GHO Stability and Peg Community Plan
• Provided GSM Launch Conditions and Parameter Recommendations
• Provided initial parameter recommendations for ETHx and sfrxETH
• Launched Aave V3 Gnosis Dashboard
• Implementation in progress for Lever B of the Synchronicity Price Adapter “Killswitch” Functionality for LST Emode in collaboration with BGD

Category	Work Completed	Commmentary
Quantitative Research	Continuous community discussion on the GHO Stability and Peg Community Plan Implementation in progress for Lever B of the Synchronicity Price Adapter “Killswitch” Functionality for LST Emode in collaboration with BGD	With extensive research and analysis on stablecoin peg, Gauntlet hopes to help formalize the community discussion around strengthening the GHO peg and organize it into its core components with actionable items with the GHO stability plan. 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	Increase USDC supply cap on V3 Arbitrum Re-enable CRV borrowing on V3 Ethereum and Polygon Lower stMATIC and MaticX non-emode LT Cap Recommendations for V3 Polygon Risk Analysis on V3 GnosisChain Increase USDC borrow and supply cap on V3 Arbitrum Interest Rate Recommendations for stablecoins across all Aave pools GSM Launch Conditions and Parameter Recommendations	Daily risk simulations and stress tests
Risk Modeling	Increase wstETH supply cap on V3 Ethereum Supply and borrow caps for V3 GnosisChain Upgrade Safety Module with stkGHO Initial Parameter Recommendations for ETHx on V3 Ethereum Initial Parameter Recommendations for sfrxETH on V3 Ethereum Recommendations for native USDC on V3 markets Increase LINK cap on V3 Arbitrum	Firefighting during unique market stress events. Risk modeling to provide insight into the risk/reward tradeoffs of Aave initiatives
Risk Monitoring and Alerting	Recommendations for KNC after KyberSwap DEX security breach on 11.02.2023 Following the Aave V2 Markets Deprecation Plan and executed V2 Ethereum Deprecation 11.20.2023 and posted V2 Ethereum and Polygon LT Reductions 12.04.2023 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	Launched the Aave V3 Gnosis Dashboard Launched an Updated Account Explorer feature on the Gauntlet Aave Dashboard to surface account level data for all markets on our dashboard. The feature includes visualizations and a table with key datapoints about the accounts. Interactive filters and a search bar allow anyone to do their own analysis of positions on the protocol.	Gauntlet continuously upgrades its product offering

Upcoming Selected Work

• Continuous analysis and recommendations for the Aave V2 Markets Deprecation Plan
• Implement Lever B of 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
• Continue support of community initiatives and market alerts

We are happy to answer any questions or hear any feedback - feel free to comment below.

[Gauntlet]

December 2023

Summary

Sharing a recap of Gauntlet’s market risk management work with Aave in December 2023. See below for this past month’s work summary and a preview of what’s coming up in January 2024.

Highlights

• Posted GSM Launch Parameter Recommendations
• Posted Flashloan Analysis and Recommendations
• Continuous community discussion on GHO Stability and Peg Community Plan
• Launched Slippage Curve Charts on Gauntlet’s risk dashboard
• Implementation in progress for Lever B of the Synchronicity Price Adapter “Killswitch” Functionality for LST Emode in collaboration with BGD

Category	Work Completed	Commmentary
Quantitative Research	Flashloan Analysis and Recommendations Continuous community discussion on the GHO Stability and Peg Community Plan Implementation in progress for Lever B of the Synchronicity Price Adapter “Killswitch” Functionality for LST Emode in collaboration with BGD	With extensive research and analysis on stablecoin peg, Gauntlet hopes to help formalize the community discussion around strengthening the GHO peg and organize it into its core components with actionable items with the GHO stability plan. 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	GSM Launch Parameter Recommendations Recommendation for MAI/MIMATIC deprecation phase 2 USDT, wstETH supply and borrow cap recommendations on V3 Ethereum, Polygon, Arbitrum m.USDC, m.USDT, METIS supply and borrow cap recommendations on V3 Metis OP borrow cap recommendation on V3 Optimism V2 Ethereum LT Reductions	Daily risk simulations and stress tests
Risk Modeling	USDT risk parameter recommendations sDAI and GNO v3 Gnosis supply cap recommendations Interest rate curve recommendations for stablecoins across all Aave deployments Increase supply cap of USDC.e on V3 Polygon rETH, LINK, CRV caps supply cap recommendations on V3 Ethereum, Arbitrum, Optimism, and Ethereum	Firefighting during unique market stress events. Risk modeling to provide insight into the risk/reward tradeoffs of Aave initiatives
Risk Monitoring and Alerting	Following the Aave V2 Markets Deprecation Plan and executed V2 Ethereum and Polygon LT reductions 12-04-2023 and posted V2 Ethereum LT reductions 01-02-2024 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	Launched Slippage Curve Charts on Gauntlet’s risk dashboard. Covering a wide range of tokens and chains, the charts can be filtered to focus on the collateral safety of each asset on a specific L1 or L2.	Gauntlet continuously upgrades its product offering

Upcoming Selected Work

• Continuous analysis and recommendations for the Aave V2 Markets Deprecation Plan
• Implement Lever B of 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
• Continue support of community initiatives and market alerts

We are happy to answer any questions or hear any feedback - feel free to comment below.