Gauntlet terminates 4-year partnership with Aave due to DAO governance challenges.
Gauntlet was Aave’s Risk Steward.
Aave now faces the task of finding a new Risk Steward after Gauntlet withdraws.
In an announcement made by Gauntlet co-founder John Morrow in an Aave forum post, Gauntlet, a prominent blockchain risk management firm, has terminated its four-year partnership with Aave, the leading decentralized lending platform managed by Aave Companies that recently rebranded into Avara.
Gauntlet’s decision, attributed to governance challenges within Aave’s decentralized autonomous organization (DAO), marks the end of a collaboration aimed at enhancing the safety and efficiency of the platform.
DAO governance disputes
Gauntlet’s role as a Risk Steward for Aave involved monitoring and analyzing protocol parameters to ensure the platform’s security.
However, according to Gauntlet co-founder John Morrow, navigating the inconsistent guidelines and objectives of Aave’s largest stakeholders became increasingly difficult over the past year. Despite Gauntlet’s efforts to contribute to Aave’s growth, the partnership was ultimately dissolved due to unresolved governance issues within the DAO structure.
Implications for Aave
As one of the largest decentralized lending platforms, Aave relies on its community of token holders to make crucial decisions through voting. The termination of Gauntlet’s partnership underscores the challenges inherent in decentralized governance, particularly in managing expectations and aligning objectives among stakeholders.
With Gauntlet withdrawing from its role as Risk Steward, Aave now faces the task of finding a suitable replacement to fulfil its risk management needs.
The announcement has elicited varied reactions within the Aave community, with some expressing disappointment at the breakdown of trust between Aave and Gauntlet. Ernesto Boado, Aave’s former CTO, voiced concerns over the termination of the partnership midway through its engagement.
The development prompts reflection on how DAOs and their partners collaborate, negotiate, and manage expectations in the rapidly evolving DeFi ecosystem. Moving forward, stakeholders may seek to establish clearer communication channels and governance frameworks to prevent similar disputes and ensure the long-term sustainability of decentralized platforms like Aave.