Morpho was chosen by the DeFi risk management agency less than a week after they parted ways with Aave, a competing lending procedure.
Following its sudden split with Aave, decentralized finance (DeFi) risk management startup Gauntlet has partnered with DeFi lending protocol Morpho.
Gauntlet will be developing its own loan products using MorphoBlue, a new protocol that enables enterprises to establish their own lending and borrowing pools called “vaults,” as part of the cooperation announced on February 27.
Lending processes often retain the services of risk management and advisory businesses like Gauntlet. Nevertheless, risk managers will be able to build and oversee their own lending policies using MorphoBlue.
Borrowing and lending in Morpho are different from those in Aave, where the decentralized autonomous organization in charge of the protocol (AaveDAO) is the final judge of all lending pools.
John Morrow, co-founder and chief operating officer of Gauntlet, severed links between his company and Aave in a forum post on February 21. Morrow attributed the breakup to problems with dealing with “inconsistent norms and unstated aims of the main stakeholders.”
Two months after agreeing to a one-year, $1.6 million deal with AaveDAO, Gauntlet unexpectedly terminated the agreement.
The decision to team up with Morpho has put the various questions that have been bothering DeFi market analysts since Gauntlet’s divorce from Aave to rest.
In an X post on February 22nd, Morpho co-founder Paul Frambot attacked Aave, saying the protocol was “attempting to hinder the expansion” of Morpho with its new incentive scheme, Merit.
Frambot went on to detail Morpho’s strategy for taking on the two DeFi lending industry heavyweights, Aave and Compound.
According to Frambot, Morpho’s Blue protocol provides users with more clear rewards and risk management than AaveV3 and CompoundV3.
According to DefiLlama statistics, Aave has almost $9.3 billion in total value locked (TVL), whereas Morpho has $2.7 billion and $978 million.
Following up on his post from February 22nd, Frambot said that the separation of Gauntlets and Aave was unavoidable due to factors such as “poorly aligned” incentives, problems with the scalability of cash flow, and the fact that politics and complex math were involved.
Also Read: IRS hires Binance.US and TaxBit Executives To Regulate Taxes
Wallets