The renewal of Gauntlet’s $2.3 million contract with crypto lending platform Compound Finance is dealing with pushback for “economic underperformance” and “conflicts of interest,” amongst different criticisms.
In a submit to Compound’s governance discussion board, made prematurely of Gauntlet’s personal renewal proposal, Founder and CEO of AlphaGrowth, Bryan Colligan, beneficial that Compound ought to “not rehire Gauntlet under the current model.”
He made 4 major criticisms, accusing Gauntlet of getting “operational gaps” and failing to take care of worthwhile collaborative applications 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 danger contract for an additional 12 months.
Alphagrowth wrote a case towards:– Mounted $2.3M annual payment with little draw back safety– Weak ROI from incentive applications– Unclear parameter change rationale– Battle of curiosity… pic.twitter.com/dZ2G6CMxXN
— Ignas | DeFi (@DefiIgnas) September 5, 2025
Related accusations had been made again in March, following the approval of a proposal to make use of competitor Morpho (for whom Gauntlet can also 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, during which token holders vote on key selections resembling protocol upgrades or hiring contractors resembling Gauntlet.
Compound is taken into account one of the crucial 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 submit revealed on AlphaGrowth titled “The Death of DAOs,” Colligan alludes to the problems such conflicts of curiosity carry 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 somewhat too intently at DeFi lending large Aave earlier than finally falling by the wayside and becoming a member of up with Morpho.
Aave governance delegate Marc Zeller is one in all Gauntlet’s harshest critics and views its relationship with Compound as parasitic. Zeller says Gauntlet would probably “drain compound treasury to zero,” and that “the only way out for COMP holders is to hit the sell button.”
As an alternative of renewal, Colligan suggests a month-long tendering stage earlier than two service suppliers are chosen to compete towards each other on an equivalent temporary over a 90-day interval. He additionally sees performance-based fee as the way in which ahead, somewhat than fastened charges.
Gauntlet’s proposal to resume its providers factors to its danger 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 12 months.
In response, Compound Basis mentioned 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 surroundings the place grudges fester and tempers flare. Most lately, Uniswap’s Hayden Adams went on the offensive towards rival decentralized alternate Bancor.
Adam’s submit 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” alternate in 2017, with Uniswap launching the next 12 months. At this time, DeFi dashboard DeFiLlama exhibits Uniswap’s $5.8 billion of complete worth locked (TVL) dwarfing Bancor’s $69 million.
