Decentralized finance (DeFi) threat administration agency Gauntlet has teamed up with DeFi lending protocol Morpho simply days after its abrupt cut up with Aave.
The partnership introduced on Feb. 27 sees Gauntlet creating its personal lending merchandise on MorphoBlue, a brand new protocol that permits companies to spin up their very own lending and borrowing swimming pools dubbed “vaults.”
Sometimes, lending protocols rent companies like Gauntlet to assist advise and handle dangers. MorphoBlue, nevertheless, will successfully give threat managers the flexibility to create and handle their very own lending protocols.
Traditionally threat administration has operated below a pull mannequin inside DAOs by way of different service suppliers, delegates, and group. In MetaMorpho, threat administration is a first-class citizen and the pull comes straight from the market. We anticipate stress-testing our capabilities and… https://t.co/qoz8aKefjp
— Gauntlet (@gauntlet_xyz) February 27, 2024
Morpho’s model of borrowing and lending differs from Aave’s, the place lending swimming pools should reply to the AaveDAO — the decentralized autonomous group answerable for governing the protocol.
In a Feb. 21 AaveDAO discussion board post, Gauntlet co-founder and working chief John Morrow broke off his agency’s relationship with Aave, citing difficulties navigating “inconsistent pointers and unwritten aims of the biggest stakeholders.”
The sudden cut up got here simply two months after Gauntlet signed a one-year, $1.6 million contract with AaveDAO.
The transfer to companion with Morpho clears up a lot of the confusion amongst DeFi market pundits, with many questioning about Gauntlet’s subsequent transfer after splitting with Aave.
Morpho co-founder Paul Frambot took purpose at Aave in a Feb. 22 X put up, claiming the protocol was “making an attempt to forestall the expansion” of Morpho by introducing a reward program dubbed Benefit.
So. Aave is making an attempt to forestall the expansion of Morpho by introducing Benefit, a rewards program. Though I choose to keep away from drama/politics to concentrate on Morpho, I’ve been requested numerous occasions to touch upon this proposal. Therefore, I’ll merely present some clarifications on the…
— Paul Frambot | Morpho (@PaulFrambot) February 19, 2024
Frambot additionally outlined how Morpho goals to compete with Aave and Compound — the 2 companies which have traditionally dominated the DeFi lending house.
In Frambot’s view, Morpho’s Blue protocol is a direct competitor to AaveV3 and CompoundV3, providing extra clear incentives and threat administration for customers.
Aave stays the DeFi lending market chief with greater than $9.3 billion in whole worth locked (TVL), in comparison with $2.7 billion and $978 million for Morpho, based on DefiLlama data.
In a follow-up Feb. 22 X put up, Frambot described Gauntlets’ cut up from Aave as inevitable, pointing to “poorly aligned” incentives, difficulties with the scalability of money circulate, and the mixture of politics and complicated arithmetic.
Gauntlet leaving Aave was inevitable on reflection.
Working as a threat advisor for DAOs may be very difficult:
– Incentives are poorly aligned.
– Cashflow may be very unsure and never scalable.
– Politics get blended with complicated maths (not good and even dangerous in case you ask me).— Paul Frambot | Morpho (@PaulFrambot) February 21, 2024
Journal: MakerDAO’s plan to bring back ‘DeFi summer’ — Rune Christensen
