The renewal of Gauntlet’s $2.3 million contract with crypto lending platform Compound Finance is going through pushback for “economic underperformance” and “conflicts of interest,” amongst different criticisms.
In a publish to Compound’s governance discussion board, made upfront of Gauntlet’s personal renewal proposal, Founder and CEO of AlphaGrowth, Bryan Colligan, really useful that Compound ought to “not rehire Gauntlet under the current model.”
He made 4 important criticisms, accusing Gauntlet of getting “operational gaps” and failing to keep up worthwhile collaborative packages with different platforms, along with the aforementioned “economic underperformance” and “conflicts of interest.”
Compound DAO is voting on whether or not to resume Gauntlet’s $2.3M threat contract for an additional yr.
Alphagrowth wrote a case towards:
– Mounted $2.3M annual payment with little draw back safety
– Weak ROI from incentive packages
– Unclear parameter change rationale
– Battle of curiosity… pic.twitter.com/dZ2G6CMxXN
— Ignas | DeFi (@DefiIgnas) September 5, 2025
Comparable accusations have been made again in March, following the approval of a proposal to make use of competitor Morpho (for whom Gauntlet can be a service supplier) to launch new markets on the Polygon community.
Within the decentralized finance (DeFi) sector, tasks are sometimes run as decentralized autonomous organizations, or DAOs, wherein token holders vote on key selections corresponding to protocol upgrades or hiring contractors corresponding to Gauntlet.
Compound is taken into account some of the well-established DAOs and has been credited with sparking 2020’s fabled ‘DeFi Summer’ by rewarding liquidity suppliers with its personal governance token, COMP.
Skepticism over DAO judgement
In a weblog publish revealed on AlphaGrowth titled “The Death of DAOs,” Colligan alludes to the problems such conflicts of curiosity convey and claims, “If you’re a service provider trying to keep contracts alive, you can’t call out inefficiency without making enemies.”
Gauntlet beforehand toed this line a bit too carefully at DeFi lending big Aave earlier than ultimately dropping by the wayside and becoming a member of up with Morpho.
Aave governance delegate Marc Zeller is one among Gauntlet’s harshest critics and views its relationship with Compound as parasitic. Zeller says Gauntlet would doubtless “drain compound treasury to zero,” and that “the only way out for COMP holders is to hit the sell button.”
As a substitute of renewal, Colligan suggests a month-long tendering stage earlier than two service suppliers are chosen to compete towards each other on an similar temporary over a 90-day interval. He additionally sees performance-based cost as the best way ahead, moderately than mounted charges.
Gauntlet’s proposal to resume its providers factors to its threat steerage having “avoided any material insolvencies,” whereas additionally highlighting the “parameter recommendations” and “risk alerts” it produced as a part of its analysis over the yr.
In response, Compound Basis stated it “supports extending our relationship with Gauntlet” primarily based on “continuity,” “avoiding disruption,” “strategic initiatives,” and “contractual enhancements.”
DAO drama
Infighting is frequent throughout the DeFi sector. Hacks, lawsuits, forks, and vampire assaults all create a high-pressure atmosphere the place grudges fester and tempers flare. Most lately, Uniswap’s Hayden Adams went on the offensive towards rival decentralized change Bancor.
Adams’ publish was made in response to a lawsuit Bancor introduced towards Uniswap in Might, which Adams referred to as “nonsense.” He argued “using first grade level math to price tokens on a blockchain” doesn’t warrant patent infringement.
Bancor launched its “constant product automated market maker” change in 2017, with Uniswap launching the next yr. Right now, DeFi dashboard DeFiLlama reveals Uniswap’s $5.8 billion of whole worth locked (TVL) dwarfing Bancor’s $69 million.
