Gauntlet

Wrapping up at Permissionless, where earlier this week Tarun Chitra was on a panel that examined how to manage risks and rewards in LRTs. h/t Rei Chiang

Introducing the Gauntlet App The app delivers a sophisticated data-driven analysis tailored to institutions, providing real-time insights into Gauntlet-curated vaults in DeFi. Explore the Gauntlet App here: https://lnkd.in/e4T3BcH8 ➡️ Visualize performance and risk metrics At launch, the app gives a detailed view of all Gauntlet-curated Morpho Labs vaults and their key performance and risk metrics, including current and historical APY, market utilization, market allocations, and collateral at risk. Read our introductory blog here: https://lnkd.in/eQ255B3B ➡️ SwissBorg is an early adopter We apply a level of mathematical rigor familiar in any TradFi shop to help institutions navigate risk-optimized paths to capture value as the next wave of capital migrates onchain. ➡️ Risk Ratings We have assigned each vault a “Risk Rating,” ranging from A+ to D. We leverage our experience in quantitative modeling and risk analysis that has successfully managed risk for DeFi's leading protocols and stablecoins. Our comprehensive methodology uses extensive data collection to inform several risk factors, including slippage, volatility, and oracle reliability. A thorough examination of our Risk Rating methodology will be published in the coming weeks. ➡️ What's coming next In the coming weeks and months, we will launch additional functionality and publish more content that explores the specifics of the Gauntlet App.

"How Much Should You Pay For Restaking Security" is now the first peer-reviewed paper on the economics of restaking! Authored by Tarun Chitra and Mallesh Pai, the paper will be presented at the 20th Conference on Web and Internet Economics (WINE) in early December. Key takeaways: ➡️ Smart allocation to AVSs is crucial for security against cascading failures ➡️ AVSs need to provide a certain amount of rewards in ETH terms which is used to 'direct' where LRTs should allocate ➡️ Restaking risk combines: PoS risk (e.g. combinatorial nature, rewards, attackers) and DeFi risk (e.g. cascades). Analyzing via a single lens does not provide a complete picture of restaking risk. Dive into the paper here 👇 https://lnkd.in/eXr-7S-6

Day 1 at TOKEN2049 saw Tarun Chitra and Walter L. speak on panels at the Epoch Summit, where they dove into restaking, LRTs, AVSs, operators, and more. 

We're in Singapore for TOKEN2049, Solana Foundation Breakpoint, Stablecoin Summit, and various side events. With Day 1 in the books, below is a rundown of where you can find us during the remainder of the week. Come chat with us at our booths at Breakpoint and StableSummit. ——— Founder and CEO Tarun Chitra will speak at various events throughout the week: Sept. 17 • Restaking Revolution: Boosting Security: https://lnkd.in/ehUJdftB Sept. 18 • Decentralized AI: The Power of Permissionless Intelligence: https://lnkd.in/eJWbsu45 • Chopping Block Live: https://lnkd.in/eNxDPp9e Sept. 19 • Countdown to Mainnet: Exploring New Emerging Ecosystems: https://lnkd.in/enKuEEdh • MegaETH Labs x Fireside chat Sept. 20 • Lou & Sons x DeFi Unplugged: Cash is King • Debate: Crypto's Only Use-Case Is Speculation: https://lnkd.in/gQ7wcYvk • What Ingredients does DeFi need to finally cook: at FHE Day • ETH Restaking Panel at AltLayer Rollup Day: https://lu.ma/r6izcwou ——— VP of Growth Nicholas Cannon will hold a keynote at Stablecoin Summit on Sept. 20, where he'll examine the use of stablecoins in prediction markets. https://lnkd.in/eiyWyTJH ——— Data Science Lead Walter L. will speak at some events: Sept. 17 and 18 • Panel at Hash Clash: Restaking the Greatest: ETH vs. BTC, presented by Staking Circle: https://lu.ma/btc_vs_eth • Keynote at Restaking & Infra Day where he'll explore restaking flows and their implications on services: https://lnkd.in/d8CeQfJK ——— Restaking Protocol Strategist Carson Brown is also joining a couple panels: Sept. 17 and 18 • Panel at Liquid Asset Summit: Let's Talk About Yields hosted by StakeStone: https://lu.ma/fqjk0w8w • Panel at Restaking Conclave to discuss the future of LRTfi: https://lnkd.in/eB-UYncr

As the largest curator on Morpho, with over a dozen Gauntlet-curated vaults live, we are well-positioned to support Morpho Labs integrations with established partners like SwissBorg, one of Europe’s leading fintech platforms for crypto. Built on Morpho’s permissionless, flexible, and secure DeFi lending stack, curated by Gauntlet, and plugged into the SwissBorg app, SwissBorg Morpho USDC provides a new avenue to access stablecoin yield in DeFi.

A new paper by Tarun Chitra (Gauntlet) and Mallesh Pai (Rice University and SMG) looks at the security risks and #economic implications of #restaking protocols in #decentralized networks. ➡ Restaking protocols allow node opertors to ‘restake’ their existing stake to provide additional services (e.g. price oracles or rollup sequences). The core question is how much security (in terms of economic incentives) do these services need to purchase to prevent cascading failures caused by attacks on multiple services? 🤔 💡 Key Findings: In scenarios where adversaries experience diminishing returns (submodular adversaries), the size of cascading failures can be limited. This result is important because it offers a more optimistic view on the security of restaking protocols compared to previous models, which assumed larger, more catastrophic failures. #Node operators (being strategic actors) will adjust their allocation of resources based on expected profits. By offering the right level of incentives (rewards), services can reduce the likelihood and impact of attacks. This implies that services can adjust their #payment schemes to strike a balance between offering enough rewards to attract operators while minimizing #security risks. The paper introduces a model in which the cost of attacking multiple services increases as the adversary attempts to compromise more services. 💭 Looking ahead: So what does this mean? Well one implication might be the potential for adaptive and dynamic incentive systems in restaking networks. The ability to dynamically adjust rewards based on real-time network conditions could lead to more resilient and cost-effective networks. For instance, services could increase incentives temporarily during periods of heightened attack risk or reduce rewards when the #network is stable. Interestingly, the findings suggest that overlapping restaking #risks (where the same node operators serve multiple services) create potential vulnerabilities. This could point to a future where some form of 'inter-service risk pooling' mechanisms could be developed like requiring operators to distribute their stake more evenly across unrelated services. Or, services might adopt #insurance-like mechanisms where the risks of overlapping services are pooled and mitigated collectively, rather than individually as is the case today. 

Gauntlet AUSD Core on Morpho’s Ethereum deployment is now live! By supplying Agora's AUSD to the vault, owners of AUSD can benefit from risk-adjusted yield on their holdings. As the largest curator on Morpho Labs, we continue to partner with innovative protocols to curate vaults that adhere to our robust risk guidelines while remaining attractive to the DeFi community. Vault Overview Name: Gauntlet AUSD Core (gtAUSDc) Supply asset: AUSD Markets: WBTC/AUSD (LLTV 86%) | wstETH/AUSD (LLTV 86%) | sDAI/AUSD (96.5%) Our approach to curation is built on a multifaceted approach that includes frequent data checks and advanced simulations to anticipate and mitigate potential risks by closely monitoring key factors such as DEX liquidity, volatility, slippage, and utilization management. Explore Gauntlet AUSD Core - https://lnkd.in/gw4VgprC Read more about our vault curation strategy - https://lnkd.in/gTuHTsYn Agora’s AUSD AUSD is a digital dollar minted 1:1 with USD fiat. It is designed to be a secure, institutional-grade digital currency, utilizing one of the world’s largest custodian banks to safeguard assets. AUSD enables users to participate in trading, lending, and payments. Due to its gas-optimized smart contract, it is the most cost-efficient stablecoin to transact with, making it ideal for traders and payments. AUSD is available on the largest DEXs (Curve, Uniswap) and will continue to be rolled out across spot and derivative CEXs.

Collateral health is a crucial variable impacting AVS economic security. In a recently published research blog, we suggest a comprehensive framework to evaluate collateral health by exploring: • POS collateral mechanism design • Collateral risk models • ETH-backed vs. non-ETH-backed collateral & dual staking Key Takeaways: • An AVS’s economic security is tied to the market value and liquidity profile of the collateral by which the AVS is secured (“value at stake”). • ETH-backed collateral (native ETH & LSTs) provides economic security that strongly correlates to the Beacon Chain, but the risk of price deviation exists, especially for smaller-cap LSTs. • Non-ETH-backed collateral poses higher risks to the economic security of an AVS. A well-designed dual-staking framework can help mitigate some of the security issues. Read more 👇 https://lnkd.in/g-JrjUVC

Collateral health is a crucial variable impacting AVS economic security. In a recently published research blog, we suggest a comprehensive framework to evaluate collateral health by exploring: • POS collateral mechanism design • Collateral risk models • ETH-backed vs. non-ETH-backed collateral & dual staking Key Takeaways: • An AVS’s economic security is tied to the market value and liquidity profile of the collateral by which the AVS is secured (“value at stake”). • ETH-backed collateral (native ETH & LSTs) provides economic security that strongly correlates to the Beacon Chain, but the risk of price deviation exists, especially for smaller-cap LSTs. • Non-ETH-backed collateral poses higher risks to the economic security of an AVS. A well-designed dual-staking framework can help mitigate some of the security issues. Read more 👇 https://lnkd.in/g-JrjUVC