Due Diligence

Our Vaults follow a disciplined risk management process designed to support resilience across changing market conditions. Before Gauntlet curates a new market and collateral asset, we conduct due diligence across both market-level and asset-level risks.

This review incorporates information from protocol teams, public documentation, on-chain data, technical materials, and ongoing monitoring. The diligence process is designed to evaluate whether an asset or market is suitable for inclusion in a Gauntlet-curated vault, while accounting for liquidity, security, operational, and market structure considerations.

Core areas of review include:

1. Market Demand and Existing Lending Usage Evaluation of the asset’s use case, current and potential borrow demand, comparable lending markets, utilization trends, and relevance to vault depositors.

2. Liquidity, Slippage, and Redemption Risk Review of on-chain liquidity, trading depth, liquidation feasibility, redemption mechanics, withdrawal timelines, liquidity backstops, and any gates or restrictions.

3. Smart Contract and Technical Risk Review of contract architecture, audits, upgradeability, access controls, privileged roles, testing practices, monitoring, and other technical dependencies.

4. Oracle, Exchange Rate, and Valuation Risk Assessment of price feeds, NAV or exchange-rate methodology, oracle infrastructure, update frequency, fallback logic, and valuation transparency.

5. Governance and Operational Risk Review of governance structure, multisig or admin controls, timelocks, key management, incident response processes, prior incidents, and operational readiness.

6. Cross-Chain and Bridge Risk Where applicable, evaluation of bridge architecture, cross-chain supply controls, messaging dependencies, emergency pause processes, bridge audits, and related incident history.

7. Counterparty, Custody, and Legal Risk For RWA, off-chain, or hybrid assets, review of underlying assets, custody arrangements, reserve reporting, legal structure, redemption rights, and relevant counterparty exposures.

8. Team, Organization, and Track Record Review of the protocol’s operating history, legal entity or governance structure, prior integrations, audits, team experience, and ongoing communication channels.

9. Yield Strategy and External Integration Risk For yield-generating assets or strategies, review of strategy mandate, allocation mechanics, external protocol dependencies, risk controls, transparency, and de-allocation procedures.

10. Asset-Specific Mechanisms Review of any unique features such as rebasing, staking or unstaking queues, transfer restrictions, allowlists, fee mechanisms, protocol-owned liquidity, wrapped-asset design, or other non-standard mechanics.

Together, these categories help Gauntlet assess whether a market or asset is appropriate for a curated vault and determine the ongoing monitoring considerations required after onboarding.