Gauntlet Market Risk Framework for Asset Listings

Since Gauntlet began its partnership with the Compound protocol, we have received requests from the community to analyze asset listings. Community members, developers, and other stakeholders often asked us questions like, “how much liquidity should this asset have before being listed? What should the asset’s initial parameters be? How do we protect the protocol from insolvency?”

Open Zeppelin recently published their asset listing guide to provide the community with a process for analyzing the smart contract and technical risks associated with listing new assets. Gauntlet’s framework focuses specifically on market risk and how Gauntlet will support the asset listing process in Compound. Our framework can be found here. This will work in conjunction with Open Zeppelin’s framework and cover the market risk side, as stated here.

To guide best practices to the Community, we provide this standard framework for assessing market risk when listing new assets as well as enabling those assets as collateral. Listing collateral is essential to the growth of the protocol. As new assets in DeFi proliferate and older assets fall out of favor, Compound must list and delist assets to maintain its usefulness as a protocol. Gauntlet will conduct these risk assessments prior to new assets being listed, given 2 weeks of notice and strong community buy-in.

We welcome and appreciate feedback from the community. If you have any thoughts or questions, please share them on this forum or message our team.