Benqi finally announced deploying the Gauntlet platform on Avalanche for risk management. Benqi is the foremost native liquidity protocol at Avalanche. Being a platform with a huge experience, Benqi recognized the latent risks associated with the development of DeFi protocols at the nascent stage. The Gauntlet platform, which is to be deployed at Avalanche, monitors market risks and governs different protocols under variable market conditions. The integration of Gauntlet with Avalanche shall help Benqi provide support and improve the scalability of the algorithmic liquidity market protocol.
Centralized exchange forums generally have closed-loop liquidations, but the decentralized exchanges that operate with DeFi protocols do not have closed-loop liquidations that they urgently need. Supporting and scaling the DeFi protocols is complicated, especially if the Blockchain network is new. The DeFi protocols often need liquidators for acting as a source of their capital funds. This need for external liquidators poses to be a problem for the platforms of DeFi protocols. The liquidators’ requirement has been decreased at the Ethereum blockchain due to the deep liquidity availability at the AMMs and accessibility to flash loans. The new DeFi ecosystems like Benqi require extra considerations. For routing liquidation non-natively, the liquidators need to apply a discount factor. Cross-chain bridges usually serve as sources of liquidity, but they aren’t feasible due to confirmation time and other factors. The Gauntlet platform shall address these challenges and more for Benqi on Avalanche price prediction.
Gauntlet on Avalanche seeks to eliminate the market risks to enable the communities and core teams to focus on developmental work. The platform is focused on optimizing the risk parameters to provide the market intelligence and resources required to drive the efficiency of the protocols faster and at scale. Gauntlet also seeks to supervise the average transaction volume on a daily basis, volatility, and other market trends to raise the borrow caps of Benqi in lockstep with the expanding ecosystem of Avalanche.