Gauntlet Partners With Morpho As TVL Rises

After Gauntlet dropped Aave last week, the move intensifies tensions between the decentralized lending protocols.

By: Pedro Solimano Loading...

Gauntlet Partners With Morpho As TVL Rises

After parting ways with Aave on Feb. 21, citing clashes with the community, risk management firm Gauntlet is now working with decentralized lending platform Morpho, one of Aave’s main competitors.

The move intensifies tensions between Morpho, Aave, and Gauntlet after the former’s CEO, Paul Frambot, claimed on Feb.19, “Aave is attempting to prevent the growth of Morpho by introducing Merit, a rewards program.”

Morpho has seen a steady rise in total value locked (TVL), according to DefiLlama. It holds $909 million in TVL, up from $283 million a year ago. Meanwhile, Aave is the leading lending protocol with $8.9 billion in TVL.

Morpho TVL chart
Morpho TVL

According to a press release shared with The Defiant, Gauntlet’s move to Morpho aims to capture some of Aave’s market share by focusing on newer lending protocols.

“Working with a team of quants used to trading in milliseconds, Metamorpho is our best opportunity yet to directly stress test our capabilities,” said Nick Gannon, VP of Growth for Gauntlet.

Morpho Labs touts itself as a new paradigm in the lending space by externalizing risk management through its new lending protocol, Morpho Blue. The platform moves risk management to an open marketplace, enabling diverse risk profiles.

The protocol has been busy adding new crypto products, having recently integrated PayPal’s new stablecoin, PYUSD, claiming it was the first DeFi protocol to do so.

Aave’s community has already voted the token in but the protocol is yet to launch the integration.

Gauntlet dropped Aave last week after citing difficulty in “navigating the inconsistent guidelines and unwritten objectives of the largest stakeholders.” The move, triggered by criticism from Aave’s community due to Gauntlet selling its software to other protocols, abruptly ended a $1.6 million two-year agreement.