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What is Gauntlet Network? Is this Project Worth The Investment?

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There are tons of blockchain technologies out there and they all focus on one particular thing but it’s very rare for a platform to introduce risk management into their services and that is where the gauntlet network comes in.

What is Gauntlet Network?

Gauntlet uses tried and tested techniques from algorithmic trading to simulate crypto networks, inform design decisions, and drive successful design and participation.

Gauntlet is a financial modeling application that assists people in managing blockchain protocols by applying strategies that have been proven in the algorithmic trading business for a long time. 

The platform makes use of agent-based simulation to adjust the capital efficiency, risk, fees, and incentives of a protocol to improve its performance. DeFi protocols that make use of the Gauntlet platform have the potential to increase capital and stakeholder returns while lowering risk at the same time.

What Gauntlet Brings To The Table

Gauntlet doesn’t solve any previous problems but it does bring something new to blockchain networks that are simulating risks. By presenting risk parameters in the form of an optimization problem, Gauntlet makes it easier for people to make decisions about them. 

Gauntlet Simulation

Simulations in the development and testing of algorithmic trading methods are widespread outside blockchain technology. Gauntlet simply brings these methods into blockchain technology.

The simulation enables an easy-to-verify, convey, and comprehend the way of analysis for users to properly weigh the risk of their decisions.

The cryptocurrency industry can benefit from Gauntlet’s financial modeling and simulation tools. According to the company, its solutions improve capital efficiency and reduce risk.

Gauntlet runs thousands of simulations across various volatilities and parameters, to provide Parameter recommendations that balance Capital Efficiency and Risk. The goal is to help the protocol unlock more borrow usage and generate more revenue while staying safe.

Source: https://gov.gauntlet.network/compound

 

Gauntlet’s product allows cryptocurrency projects, mainly decentralized finance (DeFi) platforms, to run stress tests that help them set optimal lending and collateral levels.

Function 1: System Metrics

Gauntlet considers the entire distribution of insolvencies and liquidations from the simulations when making recommendations, and weighs them against increases in borrows. With Gaunlet’s simulations, the operation of DeFi would be more efficient.

Function 2: Value At Risk

When markets are under duress, Value at Risk conveys the capital potentially at risk due to insolvencies. With Gaunlet, DeFi projects can evaluate and keep it low. When there is an opportunity to increase Capital Efficiency, it may increase after Gauntlet’s Recommendations.

Function 3: Liquidations At Risk

The term “Liquidations at Risk” refers to the amount of capital that is at risk of being liquidated while markets are under pressure (i.e. high volatility). A tail event is emulated by Gaunlet, which runs over a range of volatilities to replicate one.

Function 4: Borrow Usage

This metric indicates the extent to which collateral suppliers borrow against their supply. This is a capital efficiency metric that displays how borrowers behave concerning available capital. You may get additional information on how to compute this metric here. Gaunlet seeks maximization in all circumstances.

Function 5: Collateral Risk

This section delves deeply into the risk of each type of collateral in Compound.

Illustration 1

Essentially this means that ABS can help simulate the blockchain environment accurately. This leads to various advantages in the long run since it can help improve blockchain security as well as minimize financial risks on blockchains that employ this method. 

Because of this, Gauntlet’s analysis and risk assessments can help blockchains improve and make more informed decisions. This is why Gauntlet is so prominent amongst the crypto community.

Is it Worth Investing In?

Gauntlet has a lot going for it considering that it recently announced that they have raised $23.8 million in a Series B funding round led by Ribbit Capital, a global investment firm. This latest round of funding follows their successful 2021 achievement, during which they raised their Series A in May and turned a profit.

Ribbit Capital general partner Nick Shalek states:

“As the decentralized finance ecosystem develops and grows in complexity, the importance of strong risk management infrastructure becomes even more apparent.

Gauntlet’s expertise in risk management and capital optimization will ensure that the company continues to play a key role in facilitating broader adoption of DeFi ultimately driving institutional capital inflows towards protocols that adopt Gauntlet’s risk frameworks and products. The Ribbit team is excited to partner with Gauntlet on its journey to make DeFi the most efficient global financial system.”

Gauntlet Network Team

Gauntlet Team

One of the most attractive things about gauntlet is that it has a solid leadership who knows what they’re doing as well as reliable employees who are dedicated to creating an outstanding product. Data and biographies of their members are taken from Gauntlet’s website.

Tarun Chitra – Founder & CEO

Tarun is a graduate of D. E. Shaw Research (DESRES), Vatic Labs, a high-frequency trading firm, and Cornell University. When he was working on ASICs at DESRES in 2011, he became interested in blockchain technology because he noticed that Bitcoin ASIC mining machines were significantly delaying the manufacture of DESRES’s ASICs. 

As a simulation-based researcher at the intersection of high-performance computing and artificial intelligence over the preceding seven years, he is currently applying his findings to the blockchain ecosystem.

Rei Chiang – Founder & CTO

Rei received a B.S. in theoretical mathematics and computer science from the Massachusetts Institute of Technology. At Uber Advanced Technologies Group, Rei was responsible for developing marketplace simulations for self-driving cars as well as real-time driver incentive programs. 

His previous experience includes five years as a portfolio manager and quantitative trader at GETCO and 3Red, where he specialized in market-making tactics for fixed income and commodity futures contracts. 

John Morrow – COO

For more than a decade, John has been developing products in the fields of traditional software and financial systems. He was a founding employee of Gigster, where he was in charge of overseeing client project fulfillment as well as the company’s online marketplace for freelancers. 

His previous experience includes project management roles at Microsoft, where he worked on Windows APIs and HoloLens, as well as at Goldman Sachs. Also attending Cornell University is his bachelor’s degree in applied mathematics, physics, and computer science, which he received in 2004.

Jesse Kao – Head of Finance

Jesse graduated from the University of Texas with a Master of Public Administration and a Bachelor of Science in Business Administration.

He was recently a cofounder of a consumer technology business that received venture capital funding.He worked as an equity investor at Point72, an investment banker at Raymond James, and an auditor at Ernst & Young, among other positions. 

Gauntlet’s Clients

Gauntlet’s most prominent clients include Aave (AAVE) and Compound (COMP), the two most significant DeFi projects based on market capitalization.

Gauntlet Network Investors

 

Conclusion

Gauntlet is a first of its kind in the blockchain environment and that helps it stand out in a good way amongst investors. Its most attractive feature is that it is capable of running simulations to help blockchains make better financial choices. 

Another thing worth mentioning is that Gauntlet has a lot of talented and experienced employees that ensure that its main service of analysis and simulation runs smoothly.

We hope this information will help you in your investment process, but this is not investment advice. Every investment carries risk, especially in this industry, so DYOR before making a decision.

ABOUT THE AUTHOR

Matt is a Certified Financial Planner® and investment advisor based in Columbia, South Carolina. He writes personal finance and investment advice for The Ascent and its parent company The Motley Fool, with more than 4,500 published articles and a 2017 SABEW Best in Business award. Matt writes a weekly investment column ("Ask a Fool") that is syndicated in USA Today, and his work has been regularly featured on CNBC, Fox Business, MSN Money, and many other major outlets. He’s a graduate of the University of South Carolina and Nova Southeastern University, and holds a graduate certificate in financial planning from Florida State University.

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