Gauntlet will become a Morpho Labs Risk Curator days after its fallout with Aave

Morpho Blue is designed in a way where risk management is externalized, Morpho Labs’ CEO said

February 27, 2024 09:10 am

Gauntlet and Adobe Stock modified by Blockworks

Gauntlet, a blockchain analytics company, is joining lending protocol Morpho Labs as a Risk Curator, days after it decided to leave open-source liquidity protocol Aave.

This decision also follows growing tensions between Aave and Morpho, where Morpho’s CEO, Paul Frambot, recently accused Aave in a post on X of “attempting to prevent the growth of Morpho by introducing Merit, a rewards program.”

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Frambot told Blockworks that in its latest renewal proposal, Aave delegates mentioned that they did not want to see Gauntlet working with Morpho Labs.

“Upon ending their contract, they were free to start building on top of Morpho. For Gauntlet, this is a more scalable growth/revenue opportunity. One that they fully own and that does not involve any politics,” Frambot said. “For Morpho, the expertise and reputation of Gauntlet will surely strengthen Morpho’s network.”

Frambot noted that unlike Aave and Compound where risk experts are paid as consultants to manage a monolithic pool of liquidity, Morpho Blue is designed in a way where risk management is externalized to risk-managed vaults which are built on top.

“Anyone can build such a vault to offer lending opportunities with any risk and compliance profile. For example, a vault could replicate the risk profile of Aave v3, or of Compound v3. Risk-managed vaults earn their own fees on their own risk management. Morpho takes no cut,” Frambot said.

Teams including BlockAnalitica, B.protocol/Risk DAO, SteakHouse Financial and RE7, are already building various vaults with different collateral exposure on Morpho Blue.

The addition of Gauntlet will likely bring a “better outcome for the Morpho ecosystem and users as they will compete on performance, fees and transparency,” Frambot added.

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