Gauntlet has decided to withdraw from its role as Risk Steward for Aave, pointing to governance and operational challenges as the main reasons. This announcement marks the end of a four-year collaboration that has helped in growing Aave.
Gauntlet Withdraws From Aave Partnership, Citing Governance Challenges
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Gauntlet Ends Partnership With Aave Due to DAO Disputes
Gauntlet, a blockchain risk management firm, has officially terminated its four-year partnership with Aave, a leading decentralized lending platform. The separation was announced by Gauntlet co-founder John Morrow in an Aave forum post.
Since 2020, Gauntlet has served as an independent risk manager for Aave, contributing to the platform’s safety and efficiency through monitoring, analysis, and recommendations on protocol parameters. However, Morrow wrote in the Aave forum post that for the past year Gauntlet has had difficulty navigating, “the inconsistent guidelines and unwritten objectives of the largest stakeholders.”
The partnership’s dissolution comes after years of Gauntlet playing an important role in the decentralized finance ( defi) ecosystem, where it provided risk management services to some of the largest crypto protocols and DAOs. As Aave’s Risk Steward, Gauntlet was tasked with overseeing risk levels, updating the community, and setting lending and borrowing parameters — a role that Morrow said Gauntlet will be, “working with other contributors to find a replacement for the Risk Steward.”
Aave, launched on Ethereum in 2017 and now one of the largest decentralized lending platforms with $8.4 billion locked in its system, relies on its AAVE token holders to vote on crucial decisions. These range from setting interest rates to managing risk, with some responsibilities outsourced to professional partners like Gauntlet. These partners are compensated by the DAO’s treasury through formal governance votes.
The announcement has sparked varied reactions within the Aave community. Ernesto Boado, Aave’s former CTO, responded in Morrow’s Aave forum post:
I’m disappointed about the trust that the Aave DAO put on Gauntlet being broken in the middle of the engagement. I obviously respect the decision if other business considerations exist, but simply can’t agree that Aave mistreated Gauntlet.
As Gauntlet moves to terminate its payment stream and seeks a replacement Risk Steward, the event may prompt reflection on how DAOs and their partners collaborate, negotiate, and manage expectations.
Do you think Gauntlet made the right choice? Share your thoughts and opinions about this subject in the comments section below.
