Compound

Background

Since 2021, Gauntlet has worked with Compound to maximize the protocol’s capital efficiency given an acceptable level of market risk.

Full details of the proposal can be found here.

Proposal

A proposal to renew Gauntlet’s 12-month engagement with Compound on Risk Management, Yield Optimization, and Incentive Optimization. The scope of work includes continuous market risk management to maximize capital efficiency while minimizing the risk of insolvency and liquidations, aiming to create long-term sustainable growth. Incentive optimization aims to bootstrap liquidity, promote growth, and facilitate decentralized governance. Gauntlet renewed its partnership with Compound last year in September, which runs through September 27, 2024.

Compensation Structure

The service fee structure will be a fixed annual fee of $2,300,000 using the COMP spot price.

A portion of our payment (30% of the $2.3M fee) will be transferred from Compound in a lump sum COMP transfer directly to Gauntlet. Gauntlet will refund the DAO up to 30% of our fee ($690K) in any event, as defined in the forum post.

The remaining 70% of the fee will be paid in USDC via the Vendor Payments Aera Vault, following the same process that the community has approved for Open Zeppelin. This proposal deposits $2.2M of COMP into Aera and calls createStream on a Llama Pay Router, via the Compound Aera vault’s execute function. The stream will pay out on a per-second basis over a year. $1.61M USDC over 31536000 seconds gives a rate of 0.05105276509 USDC/sec. The additional buffer can be reclaimed by Compound governance at any time.

Gauntlet will be able to withdraw the vested funds at any time.

More details can be found in the forum post.

By approving this proposal, you agree that any services provided by Gauntlet shall be governed by the terms of service available at gauntlet.network/tos.