Gauntlet Monthly Updates

Pauljlei · February 4, 2023, 12:53am

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 · March 3, 2023, 5:07am

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 · March 6, 2023, 12:03pm

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 · March 6, 2023, 5:37pm

@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 · April 5, 2023, 4:23am

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 · May 11, 2023, 1:28am

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 · June 8, 2023, 7:30pm

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.