Gauntlet to manage lending vaults on Morpho protocol

Research agency Gauntlet will work on the Morpho lending protocol, which designs and manages the risks for loan safes.

The company will manage several credit vaults using Metamorpho, an open-source protocol for permissionless credit vaults on top of Morpho, according to a statement shared with The Block. Such credit vaults combine isolated markets and multi-asset lending pools to give users a way to earn returns on their assets.

“Working with a team of quantitative experts accustomed to trading in milliseconds, we have always looked for faster ways to proactively manage risk and seize growth opportunities. MetaMorpho is our best opportunity yet to directly test our capabilities,” said Nick Cannon, VP Growth at Gauntlet.

This is because Gauntlet had recently ended its partnership with Morpho’s competitor AaveDAO citing ‘inconsistent guidelines’.

Notably, Gauntlet is not appointed by the Morpho DAO, unlike how Gauntlet worked with Aave. Unlike the approach where DAOs select only one or two risk managers, Morpho uses a permissionless mechanism with MetaMorpho vaults.

Vaults designed by risk curators like Gauntlet earn their fees on their own risk management, and Morpho doesn’t cut corners, a spokesperson told The Block. Morpho has more than $900 million in total value locked up, nearly a tenth of the $9.2 billion locked up across chains on Aave.