Financial modeling platform Gauntlet has received funding from the Uniswap Foundation to improve DAO incentives, according to a Gauntlet announcement. Gauntlet describes itself as a "crypto-native financial risk management solutions provider." According to the announcement, it uses economic models to optimize fees and rewards for decentralized finance (DeFi) protocols. The company is creating a new division, Gauntlet Applied Research, that will focus exclusively on issues related to the growing decentralized autonomous organization (DAO) ecosystem.
In the announcement, Gauntlet said it will provide three studies to UniswapDAO. The first will be a quantitative framework that DAOs can use to assess the success or failure of the Uniswap protocol. The second will be an analysis of the behavior of traders and liquidity providers, and the third will be a proposal of at least three incentives for the DAO to achieve its goals.
All three deliverables are expected to be completed by June, Gauntlet said. Devin Walsh, executive director of the Uniswap Foundation, expressed the hope that Gauntlet's research will help improve not only the Uniswap protocol, but the entire crypto ecosystem, saying:
“One of our goals at the Uniswap Foundation is to build long-term relationships with the most talented and value-aligned teams in the space, and collaborate with them to solve the most complex and interesting problems facing the Uniswap protocol.”
DAOs have become such a fundamental feature of the crypto economy over the past few years that DAO analytics provider DeepDAO currently lists more than 2,300 existing DAOs. Most DAOs are governed by token holders who can vote directly on the blockchain to support or reject proposed protocol changes.
However, token-based DAO governance has also been criticized by some industry experts, including ethereum founder Vitalik Buterin, who said the system could lead to "ticket buying" and "blatant attacks." Over the past few months, some DAOs have attempted to provide better incentives in hopes of preventing vote-buying attacks. For example, MakerDAO adopted a constitution on March 27 to standardize the governance process and provide checks and balances to prevent the concentration of power.
