Parallel Finance Partners with Gauntlet for Dynamic Risk Management on Polkadot Ecosystem

By November 19, 2021Polkadot
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Parallel is thrilled to share our new partnership with Gauntlet. Gauntlet is a simulation platform for on-chain risk management that optimizes parameter decisions for over $45 billion in DeFi TVL across many blockchains. Gauntlet uses battle-tested techniques from the algorithmic trading industry to help protocols manage risk, fees, capital efficiency, and rewards.

Parallel is committed to risk management and optimization to increase the assurance of our DeFi platform for Polkadot and beyond. Gauntlet was the clear choice for our partner in providing dynamic risk management. This is a major focus for Parallel as we near our secured Polkadot parachain slot, prepare for the deployment of our DeFi platform, and look forward to additional chains across the blockchain industry. Gauntlet’s dedication to mitigating concerns for market risks enables our core team at Parallel to continue to focus on building cutting-edge DeFi products.

Better Polkadot, cross-parachain, and cross-network liquidity on Parallel

Parallel’s need for intricate liquidation dynamics for native Polkadot liquidity, cross-parachain liquidity, and cross-network liquidity led us to Gauntlet. Monitoring a parachain’s native liquidity levels to account for differences when a liquidator needs to route liquidations outside of Polkadot for example, is key to providing highly optimized models that support the most efficient values and liquidity levels for our users. The Gauntlet Platform takes into account a wide range of variables in agent-based simulations to manage market risks for Parallel Finance. The addition of Gauntlet ultimately leads to more efficient supply and yield for Parallel users and will only improve as we expand beyond the Polkadot blockchain in the future.

Parallel growth accelerates with dynamic risk management

Gauntlet’s expertise with existing risk management models from some of the largest DeFi protocols today will allow them to support Parallel on key metrics relating to solvency, capital efficiency, and value at risk. In particular, Gauntlet will provide Parallel with recommendations for risk parameters including collateral factors, caps, liquidation incentives, and reserve factors. Gauntlet was selected for this very reason to evaluate economic security as Parallel Finance continues to grow.

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