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.