Gauntlet Unveils Applied Research Division to Support the Growth and Longevity of Decentralized Finance
Gauntlet Applied Research will support decentralized autonomous organizations in the research and resolution of pressing protocol challenges
NEW YORK, April 11, 2023 /PRNewswire/ -- To help decentralized autonomous organizations (DAOs) grow and succeed in their goals, Gauntlet, a crypto-native financial risk management solutions provider, today announced the creation of a new division, Gauntlet Applied Research. The division will help address the most pressing challenges in crypto by offering protocols custom quantitative analysis, modeling, and optimization — building on the company's foundational capabilities in risk management solutions for decentralized finance (DeFi). For Gauntlet Applied Research's first engagement, Gauntlet has been awarded a grant from the Uniswap Foundation to review and recommend incentive program optimizations for the Uniswap Protocol.
With more than 4,000 DAOs in existence, the approach of organizing community members around one central mission has grown in popularity since the launch of the first DAO in 2016. However, DAOs continue to face challenges when it comes to security, governance, operations, and incentive alignment. Gauntlet Applied Research was created to pair the company's modeling and simulation platform with a dedicated research team to address challenges related to how DAOs operate and grow.
"In an effort to support the crypto ecosystem, we want a wider range of protocols to be able to access our leading financial modeling platform, team, and experience," said Tarun Chitra, co-founder and CEO of Gauntlet. "There are many dimensions to operating a protocol well, and DAOs must proactively address a broad set of economic issues to ensure success. Gauntlet Applied Research will be able to draw on our proven success in crypto-native economic research and our methodologies, to help DAOs address these issues."
In its initial project, Gauntlet Applied Research will study how incentive programs would impact the Uniswap Protocol's users' behaviors and how the Uniswap community can align and execute on shared objectives. The deliverables for the project follow a three-step plan to evaluate, test, and recommend incentive program archetypes for the community to consider.
The three deliverables Gauntlet will provide to the Uniswap community are:
- Quantitative evaluation framework: A quantitative framework for the Uniswap community to use in judging the success of the Uniswap Protocol as a whole. The framework will consist of a theoretical economic analysis of the Uniswap Protocol from the perspective of UNI token holders. The framework will include a methodology to evaluate both the current and future net present value of protocol revenue based on the growth and market share of the Uniswap Protocol.
- Trader and liquidity provider (LP) analysis: A historical analysis of both LP and trader cohorts in response to changing market conditions and prices. The research will use insights from the Gauntlet Platform and existing research to generate quantitatively based forecasts of how traders and LPs would likely respond to hypothetical incentive programs.
- Mechanism design enumeration proposal: A list of at least three potential incentive program archetypes based on the agreed-upon framework and results of the empirical study on LP and trader behavior. This evaluation will explore tradeoffs between the incentives and culminate in a final recommendation for which type of initiative will most likely result in success for the Uniswap Protocol.
Following the successful completion of these three deliverables and publishing the results of each to the Uniswap Protocol forums, Gauntlet will conclude this phase of the research project. The research will help the Uniswap Foundation decide how best to deploy the $21 million it has earmarked for incentive programs. The initial phase of the engagement and publishing of the deliverables is expected to be completed by June 2023.
"One of our goals at the Uniswap Foundation is to build long-term relationships with the most talented and values-aligned teams in the space, and work with them on the most complex and interesting questions facing the Uniswap Protocol," Devin Walsh, executive director, Uniswap Foundation. "Our work with Gauntlet is an excellent example of this, and we're excited to see it evolve to benefit the broader ecosystem."
Gauntlet Applied Research is structured to address a wide range of protocol analysis needs, engagement lengths, and budgets. When possible, the division will distribute its research findings as a public good to benefit the broader DeFi community. For more information about Gauntlet Applied Research and how the team can help your organization, please visit https://about.gauntlet.network/applied-research/.
About Gauntlet:
Gauntlet's financial risk management solutions help decentralized finance (DeFi) protocols understand, avoid and mitigate economic risks. Building on proprietary statistical techniques perfected in traditional finance and established academic research, Gauntlet has the longest track record in crypto risk management, with a managed peak at $40+ billion for DeFi protocols such as Aave and Compound.
Founded in 2018 by Tarun Chitra and Rei Chiang, Gauntlet has earned unicorn status and raised approximately $45 million from investors including Paradigm, Polychain and Ribbit. To learn more, visit www.gauntlet.network.
About Uniswap Foundation:
The Uniswap Foundation is a Delaware non-profit organization founded in 2022 whose mission is to support the growth, decentralization, and sustainability of DeFi protocols. Its funding was provided by the Uniswap community, through the approval of a community governance proposal. It supports the DeFi community through three pillars of work:
- Growth: Providing financial resources and other support to developers and community members working on tools and initiatives to increase usage of DeFi.
- Innovation: Funding researchers on the bleeding edge of crypto to seek ways to make DeFi more accessible.
- Advocacy: Providing resources and supporting initiatives that drive long term DeFi sustainability.
SOURCE Gauntlet
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