Gauntlet Accused of Sneaking in Previously Rejected Proposal to Adjust CRV LTV to Zero

Gauntlet, a decentralized finance (DeFi) risk management entity, seems to be facing some backlash on its latest proposal on the Aave governance forum after it was accused of fixing in elements of a previous one that was voted down by the community.

The proposal in question seeks to mitigate the risks regarding a loan tagged to Curve Finance founder Michael Egorov.

Egorov’s $64 Million Loan Draws Attention Again

A member of the Aave community, Marc Zeller, opposed one proposal from Gauntlet’s list of recommendations, which seeks to adjust CRV’s loan-to-value (LTV) on Aave version two (v2) to zero percent, claiming that the recommendation will cause more harm than good.

“Hello, we agree on all proposed changes but one: setting CRV LTV to zero. This will hurt more than help by removing the ability of CRV holders to increase their collateralization if needed by adding more collateral.”

According to Zeller, Gauntlet was attempting to sneak in the proposed change in its latest risk parameter update, which was already rejected by the Aave community in a previous proposal.

In June, Gauntlet made two recommendations to the Aave governance forum, which were to freeze CRV collateral and adjust CRV LTV to zero on Aave v2. The entity put forth the proposals after accessing a wallet tagged to Curve founder Michael Egorov, which borrowed more than $60 million USDT and put up 288,000 CRV tokens as collateral.

According to Gauntlet, the proposal would prevent the wallet from accumulating more CRV tokens to reduce risk or make the wallet diversify its collateral. Based on data from the blockchain analytics platform Debank, the loan presently consists of over 281,000 CRV collateral worth more than $220 million to borrow $64 million in USDT, with a health rate of 1.83.

Gauntlet Responds

Gauntlet, however, refuted Zeller’s claim while recognizing that the community was strongly against setting CRV LTV to zero. Subsequently, the entity said it would remove any recommendations about CRV in an updated snapshot.

“It looks like the temp check will fail, and we will take that as a definitive signal and continue to balance risk/reward with that in mind across v2. In addition, we will take this as a community preference to unbundle recommendations for assets that are considered sensitive for the community moving forward. In terms of next steps – we will remove the CRV recommendation and re-run the Snapshot vote without it.”

The post Gauntlet Accused of Sneaking in Previously Rejected Proposal to Adjust CRV LTV to Zero appeared first on CryptoPotato.