Aave DAO Considers OpenBlock as a Risk Service Provider

Aave DAO is contemplating the potential onboarding of OpenBlock as a risk service provider. The proposal, which passed a temperature check on Sunday afternoon, seeks to employ the services of OpenBlock Labs for six months to enhance Aave DAO’s risk management practices.

Aave has established itself as a dominant force in the decentralized finance (DeFi) space, allowing users to borrow and lend a wide range of cryptocurrencies. However, in February, prominent risk management firm Gauntlet terminated its four-year partnership with the protocol due to difficulties working with the DAO.

Gauntlet pinned its decision on “inconsistent guidelines and unwritten objectives” from Aave’s “largest stakeholders.”

Given the open position, OpenBlock Labs, a provider of risk management solutions for blockchain protocols, has submitted a proposal to partner with Aave. The core idea revolves around integrating OpenBlock’s risk assessment tools into the Aave protocol.

OpenBlock’s proposal outlines a 6-month engagement aimed at bolstering Aave’s risk assessment capabilities through data-driven analysis and modeling. Interestingly, the risk managing service will cost $420,000 for the 6 months.

OpenBlock boasts a distinguished pedigree, having collaborated with leading protocols like EigenLayer, Lido, and Uniswap. As per the proposal, OpenBlock has expertise in Liquidity Staking Tokens (LSTs) and Liquid Staking Derivatives (LRTs), asset classes with growing prominence on Aave. This specialized knowledge positions them to provide insightful analysis of these assets’ impact on liquidity and lending activities within the Aave ecosystem. OpenBlock believes this expertise could empower Aave to become a pioneer in the integration of LRTs while maintaining robust risk management practices.