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.