Announcing our new partnerships
Gauntlet is excited to announce three new partnerships with leading blockchain companies Stellar, Celo, and Compound. We wanted to share more info on how we’re using simulation to help their teams iteratively design, launch, and scale new financial systems.
Stellar
Stellar is one of the most popular crypto payments solutions in the world and has grown to become a top ten cryptocurrency by market cap over the past 5 years. As we covered in a previous post, Stellar uses a Byzantine Fault Tolerant protocol that supports fast transaction confirmation times while also guaranteeing safety and fault tolerance over liveness. One key facet of the protocol is the selection of a validator set called a “Quorum”, and without the right quorum configuration, these guarantees can become broken.
We are working with Stellar to identify how they can improve quorum selection to ensure safety and liveness are always upheld. To this end, Gauntlet has simulated how the Stellar consensus mechanism performs under different network topologies and latencies. This departs from much of our earlier work, which has focused on the economic side of protocol design. Simulation can be valuable both for modeling the cost of attacks (which do sometimes depend on the underlying network) and the resiliency of these systems under changes or deterioration of network conditions. This will help node operators dynamically choose quorums that can prevent disruptions to the Stellar network — without the need for centralized coordination.
Compound
Compound is a decentralized money market — allowing users & applications to frictionlessly earn interest or borrow Ethereum assets without relying on a counterparty. Since their launch in 2018, Compound has quickly risen to become one of the most utilized applications in decentralized finance. One of Compound’s goals is to ensure that lenders never lose money, and they have created very stringent collateral requirements to make sure this never happens.
Compound is using the Gauntlet platform to model market risk scenarios relevant to their protocol. By using historical data and stress tests, Gauntlet is building a model that will help Compound ensure that lenders are safe under any market conditions. We are also backtesting different assets so that Compound can introduce new lending pairs with confidence. By running Compound’s contracts directly in our modified Ethereum Virtual Machine (EVM), we can be sure that our model is completely accurate.
Celo
Celo is building an open platform that makes financial tools accessible to anyone with a mobile phone. By using phone numbers as a form of identity, Celo aims to provide mobile-first DeFi services to those who have been excluded from the current financial system. One key component of the Celo protocol is a stablecoin (which you can read about here and here) that👍 uses a novel combination of seigniorage shares (which also serve as a staking and gas token) and crypto-asset collateral backing.
Celo is using the Gauntlet platform to help model their stability mechanism, which uses arbitrageurs to create stability when market forces push their coin’s price from its target. We’re creating agent models of these arbitrageurs as well as running their actual contracts in our simulation environment so we can be sure that things don’t just work in theory, but in practice. We’re running thousands of simulations under different conditions so that we can find the most successful parameterization of the protocol, as well as ensure that stability can be preserved even under extreme market conditions.
We’re excited to share more about this work in the near future. Be sure to check back soon for details on the research and analysis that we complete with Stellar, Compound and Celo. As always, if you are interested in learning more about how you could work with Gauntlet, feel free to reach out to me directly (john@gauntlet.network).
